Lala May Have Just Built The Next Revolution In Digital Music

Call me a skeptic. When Lala came to our offices last week trying to convince me that music was heading to the cloud, and that they were going to help lead the transition, I wasn’t convinced at first. The company has floundered for years, moving from a CD swapping service to a failed music hub that shut down last summer. But now they’ve completely redesigned and are coming back with an advertising-free music site that makes me think that they might be onto something big here.

At first glance, Lala resembles most other music stores. You use a search box to find your favorite artists, and can buy DRM-free music for around 90 cents (there is some slight variation depending on the song). Each page features an artist profile, their albums, and playlists that other users have included them on. It’s standard fare, and while the DRM-free music is nice, it would have a tough time competing with Amazon on its own.

Fortunately Lala’s real potential stems from its integrated media player and your web library (which looks a lot like iTunes, but in the cloud). At the top of the screen is a music player that will continue playing whatever song you listen to, no matter where you navigate on the site. And you’ll have lots of content to play: users will be able to play any song on the site’s massive catalog in its entirety exactly one time free of charge. The limitation sounds restrictive at first, but it costs only 10 cents to buy a “web song” – giving you the ability to stream that song as many times as you’d like in the future. And if you decide to buy the normal MP3 later, that 10 cents will go towards your purchase.

This 10 cent price point is incredibly addictive, and is essential to Lala’s monetization strategy (users are given 50 free web songs to get them used to the idea). CEO Geoff Ralston explains that other sites like imeem or MySpace Music need to inundate users with advertising in order to make money – something that isn’t conducive to a good music listening experience. Conversely, Lala wants you to listen to as much music as possible in the hopes that you’ll keep clicking that addictive 10 cent “web song” button, and is forgoing advertising entirely. The result is very refreshing.

Lala has also done some serious legal wrangling to help you populate your online library. Using the site’s helper application (available on Windows and Mac), Lala can scan your iTunes music library and add every song you already own to your Lala web library, essentially giving you online streaming access to any song you already have on your computer. And best of all: Lala will give you free, unlimited streaming access to every song in your library, even the ones you’ve acquired in ways that weren’t quite legal. Ralston says that the record labels resisted this at first (“why should we give them access to something they stole”), but eventually came to the conclusion that users weren’t going to buy something they’d already downloaded.

Lala has signed all four major labels and 175,000 independent artists to its extensive library. There are still occasional songs that aren’t totally licensed (you can’t buy the 10 cent versions of any Led Zeppelin songs, for example), but this will likely change in the future.

The real question is whether or not music really is ready to make its way to the cloud. It seems that everything else has been – be it Email and desktop applications like Word and even rich media like photographs. With the increasingly wide spread of high speed mobile devices like the iPhone it seems only a matter of time before users stop worrying about syncing and transferring music and simply stream it from a central server. I’m not sure users will be comfortable about not owning full copies of any of their websongs (what happens when Lala goes down?), but for 10 cents, it’s worth a shot.