Evolution of Streaming: Lala.com Rise and Fall (history, business model, Apple buyout), Streaming Media History & Progression, Music Industry Evolution (new revenue streams post Napster), Current Music Services


In the early 1950s, we owned the only phonograph in our locality, a British His Master’s Voice (HMV) model. Before playing any music, the phonograph would be feather-dusted, the velvet-bagged horn taken out, gingerly cleaned and attached, a needle from the accessories box carefully picked and inserted into the claw-like holder and the phonograph pronounced ready for playing.

My mother would then crank the handle to check that the record plate rotated freely. Next, she would fetch our collection of 78 rpm shellac records from a box and slide them one by one into their slots in a two-row rack that could be mounted onto the wall, placed on two prongs that otherwise served as prongs for a bookrack, which would then be shifted to my room.

Then came the acid test-playing one record, lifting the needle holder to rest at a 120° angle, reversing sides of the record on the plate before bringing the needle down onto the 1/8th inch-wide gently inward angled shiny outer triple-groove rim of the record, so that the needle could slide into the first groove on the record. Whenever a record’s grooves gave way, evinced by shrill and scratchy tones,that record would be sent to the local pottery for conversion into a neat hand painted vase. Now phonographs are collector’s items while, in the past six decades, things have changed considerably.

We have passed through the era of records of different sizes played at different speeds, the reel-to-reel tape recorder with 12-inch reels, the audio cassette and its assorted paraphernalia of an audio tape deck, amplifiers, speakers, etc., into the digital era, where the simplest unit is an audio or audio-video disc.The age of physical delivery of music is over. The contemporary digital music marketplace is open to one and all, the only limitation being the necessary legal copyright law. Over the years, the content viz., music, has not changed; perhaps only in the quality of recording and reproduction, but the presentation formats have undergone a sea change− for the better− and will continue to do so as technology marches ahead relentlessly. We could start in 2006.

The Market: You can buy music online, by downloading a tune and recording it (burning it onto a CD), on a per-song basis or via a subscription. You can simply listen to music that is streamed, with the option of paying it, or listen to streamed music run by services that don’t own the source file without paying for it.

The first free online high fidelity online music archive of downloadable songs was the 1993 Internet Underground Music Archive (IUMA). IUMA provided unsigned artists who registered with them a free URL and web page. The artists then presented their music over the web in stream, download, and internet radio format with no bandwidth fees. The file formats used to encode the music were .wav, .aiff and .mp2., followed by .mp3 when that popular format was made available. Ritmoteca.com (1998) let visitors skim through a catalog of more than 300,000 songs− organized by album− preview a 30 second music clip or video and purchase the .mp3 format download at $0.99 for single songs $9.99 for the entire 12-song album. The MP3 format was cheap, but showed minor flaws when replaying a recording.

IUMA signed distribution deals with Universal, Warner and Bertelsmann Music Groups and Sony for online digital distribution rights for artists such as U2, Madonna, Enrique Iglesias and Jay-Z. Major record labels like Sony and EMI and joint ventures like Universal Music Group and Sony, AOL and Time Warner failed due to high costs. Despite failures, the market was growing when Napster burst in on the scene in June 1999, as a pioneering peer-to-peer (P2P) file sharing web service focused on sharing music files in MP3 format, only to run into copyright infringement laws and ceased operations in 2001. Reincarnated as an online music store years later, it was acquired by Rhapsody in Dec. 2011. Today, it is Rhapsody’s leading streaming music service, giving members ad-free access to more than 32 million songs.

Digital audio download rocketed dramatically after the launch of the iTunes Music Store in January 2001 (now iTunes Store) and the advent of portable gadgets like the Apple iPod and Sony Walkman. On 3 April 2008, iTunes Store overtook Wal-Mart as the biggest music retailer in the United States, becoming the largest online music store with around 80% of the market later that month. By then, La La Media, Inc. “LaLa is such an intriguing idea it’s weird to think it hasn’t been thought of before!” “The iPod is the greatest portable music device ever invented,” said Bill Nguyen, LaLa’s co-founder. That’s 2006 thinking for you. Just about ONE decade ago!

About LaLa in 2006

This is Time Magazine’s take on LaLa as an Online CD-Trading Service, as on Mar. 16, 2006:

As a member, you book used CDs for $1 each (plus 49 cents in postage). How does that work? The answer lies in La La’s twist of the Golden Rule: “The number of CDs received depends directly on the number of CDs you mail to other members.”

Beta testers have hit the site, a cross between MySpace and DVD Aficionado. You search for artists, album names or song titles, then list the CDs you come across as ones you have or ones you want. Listing a CD that you have doesn’t mean you’re prepared to send it to another member. Still, the more CDs you list, the more you’ll find people wanting your discs. Once you start mailing them — using La La’s preprinted mailing envelopes — the discs on your Want List should start to arrive.

The service is still in its infancy, working out issues like album art. The rules state that you must only mail original factory-pressed CDs. No burned copies, no booklets. The reason is that the postage only covers the weight of the disc. Some members are including the booklets and supplementing the postage with an extra stamp or two, but that’s off their own cuff.

A touchier subject is copying. The rule banning the trade of burned CDs makes sense, otherwise La La would become an illegal file-sharing network. Trading used CDs is perfectly legal, but is it legal to copy a CD before you mail it? It’s not, technically, but most people will save a virtual copy for themselves to listen to on iTunes.

The easiest way to list CDs that you own is through La La’s iTunes plug-in. The ingenious little program appears as a Visualizer option. When you play a song, then click the Visualizer, the screen shows an album by the artist you’re playing, plus a host of similar albums. You can say if you have or want each album displayed, and as the song plays, more albums appear. You can then catalog your collection, as you listen to it.

The real advantage to a service like this is that it can put you in touch with music that you can’t always find. Since it’s about trading CDs, you can find music that has yet to make its way to iTunes, like Led Zeppelin and the Beatles, as well as stuff that you might not be able to otherwise find (example: Adios Amigo: A Tribute to Arthur Alexander featuring Mark Knopfler, Elvis Costello, Frank Black and Robert Plant). The service boasts a catalog with 10 times as many albums as iTunes. While this is true, in order to get at even a fraction of that music, you’ll have to play along.

La La is still in the beta-testing stage, but if you want to join it, you can sign up for a limited time here. Getting started is free — you only enter credit card info when you start trading. The company has re-engineered its envelopes and pricing to cope with sending CD covers with the disc, by raising the price to $1.75.

2007 saw La La media, Inc. introducing LaLa 2.0.

LaLa 3.0. By mid-2009, rumors emerged about a possible takeover by iTunes. Apple Inc. acquired LaLa on December 4, 2009. In the 6-month grace period given by Apple, LaLa announced that it would no longer accept new members and that all members who had dues in the form of downloads pending would get their due from Apple’s iTunes. LaLa shut shop on 31 May 2010, but still provided full-length previews of top rated songs to Billboard.com till objected to by Apple, when it finally severed all links with music.

La La’s History: 2007-2010

La La’s history was emblazoned in its heydays. Harry McCracken of the magazine Technologizer, wrote:

“Among other things, LaLa is:

  • Full streaming “Web albums” on LaLa vs $9.99 on iTunes and cheaper than even Amazon.com.
  • The fab service choked by the music industry in 2003.
  • A fund that will set aside 20 percent of trading revenues to compensate artists.
  • A fund that will set aside 20 percent of trading revenues to compensate artists.


[1] My.MP3.com was a web site best known as a legal, free music-sharing service, popular with independent musicians for promoting their work. Almost all old songs were available here. It was shut down on December 2, 2003.

 Screenshot of LaLa's impending demise.

Fig. 2: Screenshot of LaLa’s impending demise.

Moreover, it worked extraordinarily well. It identified audio tracks on your desk or laptop and immediately unlocked them in your LaLa collection. Old stuff like 70 to 80 year-old radio shows were uploaded track by track, a slow process.

How LaLa Worked: The following advertorial written by the eponymous Andrew Davidson shows that LaLa used close to contemporaneous state-of-the-art technology, but a quick read shows you how far ahead today’s technology has come. Newbies will find some characteristics laughably archaic.

“LaLa.com is a website for trading used CD’s; exchange your used CDs with other registered LaLa.com members. It is explicitly designed for trading genuine, commercial audio CDs, and NOT burned copies, bootlegs (sic), or MP3s. LaLa will charge you $1.75 for each CD you receive, shipping costs included, so it’s an excellent method to exchange your old CDs that have started to bore you with better ones at a low cost.”

It operates like this:

  • List your CDs on the LaLa site. Also list CDs you would like.
  • If another LaLa member wants your CD, a ‘Ship It’ button appears next to that CD when you visit the site. This is done by one of LaLa’s 23-member staff.
  • If you click Ship It, LaLa provides you the address of who to mail it to.
  • Fill out the mailer with their address, and mail the CD.
  • When you ship a CD, your account is credited one CD, i.e., LaLa ‘owes’ you a CD.
  • Similarly, LaLa shows your address to a member who has at least one of the CDs you want, so some member will send you at least one disc that you want.
  • When you receive a CD, you’re quits with LaLa.
  • When you get a CD you have requested, please confirm with LaLa that you have received it.
  • If you receive a defective disc, you can report it to LaLa and be credited a disc.

LaLa keeps track of your progress, so that you get one disc you want for each one mailed, although it’s not always in sync. It is possible that you are owed a few discs after you send out a few. How soon you get CDs depends on which CDs you want, their popularity, etc. You can enter CDs into your Want List any time you wish. The larger your Want List, the quicker you come close to becoming even. If your Want List is small or exclusive, it may take a week or more to become even.

When you receive a CD, it is yours. LaLa is not a lending site like NetFlix. Don’t like a disc? Trade it away. Always exchange a CD when you’re bored with it. One unavoidable part of LaLa is that you don’t know which CD is going to come next. You cannot prioritize your Want List, so the CD you get is completely at random. This might excite fans of Alfred Hitchcock, but, over time, you can get a feel for what type of CDs will be sent quickly on request.

LaLa has added features to facilitate listing your ‘haves’. As you type the title of the CD or artist, a drop-down list appears with possible matches, thus minimizing typing. You may also enter the UPC bar code, or even a song on the disc to find it. You can’t list CDs that are not in their database. But their database is enormous and has almost every CD with a bar code. Allowing your mouse to hover over any album listing throughout the site pops up a box on the right side of the screen with album art and track listing

—a nice touch, and one that makes it simple to browse through lists of other members’ discs without loading new pages every time you want more details on an album.

The same holds good for your Want List. Do exercise caution with your Want List. The moment you put it there, you could get that disc any time you are owed discs. So contemplate your choice carefully prior to listing it as a Want.

When you sign up the first time, LaLa sends you a batch of special pre-metered mailers and clamshell cases for the discs. Your part in shipping and handling is limited to writing the recipient’s address on the mailer, putting the CD in clamshell case in the mailer, and putting the mailer in a mailbox.

When you inform LaLa that you have received a desired CD, you also confirm that the sender may be credited with having sent one. This ensures people can’t bypass the system and get free CDs without actually sending any out. Multiple CD sets and box sets give LaLa no choice but to handle in a disc-for-disc fashion. This means that you won’t get the equivalent multi-disc set at one time. That’s something we have to live with.

Another problem LaLa faces is cover art. Originally, LaLa was about sending discs only, sans cover booklets. Some people sent the booklets anyway. Now you can specify via your settings page whether you want to receive with cover art only, or have no real preference. Regrettably there is no way to specify that you want both front and back art (i.e., the cover booklet as well as the inlay card). LaLa defines art as the cover book only, yet most people send the tray card as well.

LaLa keeps a ‘karma’− an invisible tracking algorithm− score for every member, recording defaults. LaLa does not guarantee that the discs you receive will be spotless or scratch free, etc. However, they do guarantee playability. They require that all tracks be playable on all CDs sent. If you send out bad discs, your “karma” score is reduced, and if you do not desist from cheating, it’ll be tra la la for you.

LaLa strangely disallows trading promotional copies of CDs. These are discs marked “For Promo Only. Not for Resale.” Unfortunately there are probably millions of discs like these in used CD stores, etc., so do double-check before sending a disc that may have come from a used CD store or garage sale.

When you first sign up, you will be allowed to send only 5 CDs more than received, to keep the trading balance somewhat equal and the LaLa CD economy humming along. As you trade more and more, this limit will be increased to 10, then 15 (ibid).

CDs That Are Easy To Get On LaLa

Discs along the lines of “VH1 Top Hits of the 80’s,” “Pure Funk,” or other similar ‘Greatest Eighties and Nineties Hits’ pop compilation discs are received very quickly. The “Now That’s What I Call Music” series are also received pronto.

LaLa is a good site to get CD singles and EPs, possibly because they have fewer songs than regular full length CDs and seem like a better deal. I’ve gotten several rare CD singles that would probably have been about $10 or more on eBay.

In general, you can receive almost any disc on LaLa. There is no special genre that it specializes in; they have it all, from pop, rock n roll, blues, classical, country, to electronic dance. They even list import CDs that you probably didn’t even know existed (ibid).

How to Find Good CDs for your Want List

Go to an artist page, e.g., the mid-1990s Thievery Corporation; click the compilations tab. This lists all compilation CDs that have Thievery Corporation on them. Most of these CDs will probably be good if you like Thievery Corporation! Build up a good want list of CDs you haven’t heard of, but are most likely pretty good.

Other Features of LaLa.com

LaLa other features include: custom radio stations, tags, streaming radio (WOXY), reviews, see who owns that disc, how popular a CD is. There’s plenty of stuff to surf. The site is a facilitator, turning the Internet into a swap shop with more than 1.8 million unique titles and thousands of users.

LaLa also sells new CDs: you can buy some of the CDs you want as regular new CDs. Prices seem competitive, but do add that shipping fee. And, not all CDs are available for purchase.

You can sample the tracks of almost all mainstream CDs in a low-quality 30-second snippets without exchanging any CDs! LaLa is one of the best sites on the web for sampling CDs though the quality is very low. I estimate about 24 kbps, but something’s better than nothing.

One neat feature is that you can sift through your own CD collection. So if you have bags of compilation discs, you can find that one song easily, a nifty feature. It would be nice if they added the ability to export your CD collection as a database, but that is not yet available.

  • Trade used CDs cheaply and easily at a fraction of the price of buying used CDs, and much better than selling used CDs to secondhand CD stores for pennies.
  • Access to a huge store of used CDs.
  • Sample snippets of the CDs before adding them to your Want List.
  • Good way to get value out of your used CDs just waiting out there collecting dust.
  • Responsive site creators who listen to their users.
  • Easy to add CDs to the site.
  • Search your own CD collection by song or artist.
  • Website is 100% ad free. At no point while listening to your library of music through their website will you come across annoying ads.
  • The price seems to be extremely fair − a win-win situation for all.


  • Requires a credit card.
  • Costs $1.75 (+ a traded disc of yours) per disc you receive. So so, compared to other sources of used CDs, however, it can add up.
  • No direct control over what discs you receive first or if you ever receive them. Some CDs are tougher to get than others.
  • You won’t always receive cover art. Even if you set it as a requirement, you may not receive the inlay card.
  • Some discs/art are not in immaculate condition (but LaLa guarantees their playability).
  • United States addressees only (ibid).
  • You can download a purchased MP3 only once − so don’t lose it.
  • Operates only in the MP3 format.
  • Does not present comprehensive album metadata.

If you have CDs that you would like to trade, LaLa.com is a great way to do it. You’re not always guaranteed to get pristine discs and cover art, but you can’t beat the price and the convenience. LaLa is far better than selling your used CDs for cents on the dollar to a used CD store.

Comments? Feedback? If you have an (sic) comments or feedback, you can email me at AndrewDavidson {at} AndrewDavidson {dot} com, or use my Feedback Form if you prefer.

Leaving Andrew Davidson alone, though still in Web 2. For most songs, it doesn’t actually copy the music but checks to see if the song is on your PC or Mac and, if so, matches it to songs already on LaLa’s servers. But if you have songs not on their servers, it does copy them over. Technically, a Lala Web song isn’t an actual copy of a song. Instead, it’s just an electronic pointer to a master copy in Lala’s central jukebox.

Dave Davis from CityBeat, Cincinnati, waxed eloquent in July.

Their home page claimed over 8 million licensed songs available.

there are cannot be traded.

For what seems a complex way of buying and selling, LaLa has been amazingly popular. It profits on the fact that hundreds of thousands of people’s record collections have more unobtainable and obscure objets désir than the best stocked record shop, online or off. The pleasant surprise, and cheap price, of receiving tracks you’d never believe you’d find lures you into a world where sending off CDs becomes part of the experience of collecting music.

Such was the stage just seven years ago!

LaLa 3.0, the next version of the site rolled out, though still in open-beta mode, in June 2008. Trading and non-trading members had different modes of access to certain site features. Registered LaLa members could stream songs or albums in their entirety once at no cost. Individual tracks could be purchased in MP3 format for 89 cents, or, for ten cents, members could purchase the right to stream a song from the website as many times as desired (a “web song”). All members could also upload their MP3 song libraries for personal web access from any computer. The deal, though it turned out to be a no show when Apple acquired LaLa on December 4, 2009 for $85 million, had its exciting moments.

In mid-2009, when rumors emerged about a possible takeover by iTunes, LaLa had its supporters. Matt Geraghty, writing on March 16, 2009 for Scattergather, put it succinctly: “Out of the 1000’s of digital music services to choose from, LaLa shines for four reasons: its content, delivery model, interface and user experience.”

Geraghty theorizes, “Imagine your entire music collection built into your Facebook profile living in the cloud. You could share and discover music within your networks without having to add 3rd party applications that play music. Could LaLa and Facebook be the perfect marriage? Perhaps, but whether LaLa would have to modify their model to play in the social media space remains to be seen.”

On October 22, 2009, LaLa’s founder Bill Nguyen came to New York to show music label executives and reporters a version of LaLa’s music service designed as an app for Apple’s iTunes to boost mutual profit from music. Instead, he was stunned by two bits of good tidings:

  1. Google announced its consent to LaLa’s plan to use its service as back-end infrastructure for a new music search feature to enhance its overall search offering. An announcement was made on Oct. 28, 2009 of Google Inc.’s new music search feature that put links to free song plays at the top of search results. MySpace-owned iLike was the third partner in this scheme.
  2. Facebook suddenly pushed up its announcement that it, too, planned to unveil a LaLa-based music plan linked to its gift shop. The Lala-powered music service boasted of a playlist of more than eight million tunes, which could be bought as a “Web songs” at a cost of one Facebook credit each. Facebook credits are a currency for purchases at the social networking service, and a single credit costs about ten cents (US). Traffic from Facebook alone could increase the number of songs doled out from LaLa’s servers by an order of magnitude above the 5 million or so songs it currently delivered each month. Web songs can be played as often as desired using a Lala mini-application, or widget, at Facebook or at LaLa’s website. Essentially, Facebook now allows its users to give one another digital songs as gifts.

Apple Inc. acquired LaLa on December 4, 2009. Warner Music Group received at least $9 million back of the $20 million it had invested in LaLa.com, writing off $11 million of its $20 investment (rationale explained on page-13). In the 6-month grace period given by Apple, LaLa announced that it would no longer accept new members and that all members who had dues in the form of downloads pending would get their due from Apple’s iTunes. LaLa shut shop on 31 May 2010, but still provided full-length previews of top rated songs to Billboard.com till objected to by iTunes, when it finally severed all links with music. With time, iTunes began hosting Facebook via an app.

Why did Apple Buy Out LaLa?

  1. To continue its climb towards dominating the world of recorded music.
  2. To present industry players a fait accompli.
  3. To make its iPhone, iPod and iPad the major smartphone/pods/pads with free access to iTunes.
  4. To increase sales of music, which was, at best, iffy.
  5. To contest the commercial success of Spotify, the Swedish streaming music service, which Apple saw as an European competitor.
  6. To overtake the popularity of Pandora, with its free streaming services and 1.5 million daily audience, globally.
  7. To acquire a cloud-based, streaming service, which it did not possess.
  8. To get the LaLa team on board.

Apple and LaLa in 2009-10

Analysts believe that Apple will move its iTunes into the cloud, integrating LaLa’s trend-defying model of allowing users full freedom in handling their music online, without any software other than Music Mover, which Apple would sort out. After all, anywhere, anytime access is an out and out winner. More importantly, the reason LaLa did not take off as expected and forecast, despite its huge cloud library and ease of operation, is that people do not normally entrust their music collection to the servers of a start-up whose prospects are uncertain.

Not that LaLa didn’t try their best to break down the anonymity of Internet transactions by doing everything it could to personalize the system. The site tried to foster a sense of community between members, and 50 people hooked up last week in the real world to see a concert together. Even the CD mailers that Lala provided had space on the back where users were encouraged to list favorite songs and make comments about the album being swapped. Sadly, all efforts were in vain. There would be no such uncertainty with Apple.

LaLa and Piracy

Detractors of LaLa.com say it is based on ‘facilitating piracy.’  Why demonize a novel sharing service instead of finding a way to embrace and monetize what music fans so obviously want? LaLa.com has its plus points. It enables a more efficient market by reducing transaction costs in ways not possible in the commercial world.  People can still sell their CDs via eBay — LaLa has only modified the model. Yes, some will use LaLa.com in illegitimate ways, but many will use it for genuine purposes. People who bought their CDs paid the licensors and thus have the right to give away their own property in this way.

Today, almost everything facilitates piracy to some extent.  Photocopiers make copies, computers make copies, the Internet distributes copies. There is P2P, there are darknets, sneakernets, campus lans; in a lustrum, people may be swapping HD-DVDs worth of music. Artists will benefit and get paid in this world, may be differently and probably more. Lala is certainly part of a larger structure that’s shaking settled business models. So how is it “facilitating piracy?

Given the numerous other convenient methods people can unlawfully acquire copyrighted content, Lala is no mortal threat (ibid). Downloaders (as opposed to uploaders) on P2P have little vulnerability.  Swapping CDs filled with mp3s is far easier and costs less than using LaLa. But you cannot exit the P2P sphere and expect invulnerability. And LaLa is giving 20% of its returns to artists. That’s a better deal than they ever got from used record stores.  What’s more, LaLa’s breakeven point on CD trading works out to 175000+ trades a day, 24 x 7 x 365. Till better days come, it’s planning to use CD trading as a loss leader to sell CDs and online downloads. LaLa only survives if it helps artists sell more records.

Original Business Model

  • The original primary function of the website was brokering CD trades between users.
  • At Launch, Trading Fee $1.49 per CD swap
  1. Split the $1.49 into two lots, [income]+ [$0.65 postage +$0.49 shipping charge]
    –Postage charges: $0.65 stamp + $0.49 shipping charge= $1.14.
  2. Income=$1.49 less $1.14 = $0.35; less Taxes (@ 30% = $0.11)=$0.24.
  3. Artists dues @ 20% = $0.05.
  4. Gross Income=$0.24-$0.05 = $0.19.
  5. Salary of 23 employees, median $2,000 p.m.; Outgo =$46,000.
  6. Other expenses=$5,000 p.m.; Total outgo per mensem = $51,000 p.m.
  7. CD exchanges required to break even=51000/0.19= 268,421 say 268,000 p.m.
  8. CD trades in 1st year of operations= 1 million = 83,330 p.m. say 83,000.
  9. LOSS = 268000-83000 CD trades = 185,000 CD trades p.m.
    Financial loss = 185,000 x $1.49 x 12 = $ 275,650 p.m. x 12 = $3.31 million per year.
  • Post Revision

The only changes would be increases in membership, subscription rate and increments in pay, if any. Gross income would rise to $0.19 + $0.26= $0.45−9 cents to artists per swap p.m. = $0.36.

  1.  Total outgo p.m. = say $56,000 allowing $5,000 as marginal increase in salary.
  2. CD exchanges required to break even= 56,000/0.36 = 155,555 say 155,000.
  3. CD trades in 2nd year of operations= 1.2 million = 100,000 p.m.
  4. Loss=155,000-100,000 = 55,000 CD trades.
  5. Financial loss=55,000 x $1.75 x 12=1.155 million p.a.

Out of the blue, anonymous angel investors popped up to funding WOXY.com and on July 12, 2004, resumed its WOXY.com broadcast. But financial problems dogged the site, despite overwhelming popularity with listeners and WOXY.com went off the air again in Sep. 2006.

Bill Nguyen, co-founder of LaLa.com, always had a soft spot for radio stations broadcasting music for the public at large, particularly online. In Sep. 2006, he showed interest in buying Woxie and resuming online broadcasting. He planned to link LaLa to WOXY.com, to allow the latter’s listeners to buy music that they heard on the station beamed directly from LaLa. Lala had integrated the library from Woxie, the radio library of which included thousands of CDs accumulated over 20 years.

Along with WOXY’s relaunch, LaLa unrolled user-generated music channels, letting users program their own stations for free and allowing others to tune in. The new feature, which LaLa reps called ‘citizen radio’, gave users live feedback on who was listening, and LaLa paid the licensing fees for the songs.

Despite the takeover, both Lala and WOXY remained independent of each other. The radio station’s avid listeners even demanded the return of the entire former staff, including its DJs, music and program director. LaLa acquiesced gracefully. Moreover, LaLa and WOXY continued to extend WOXY’s series of live music sessions, through a podcast series called Lounge Acts, which WOXY had broadcast regularly for 20 years. Lounge Acts were designed to expose new emerging artists and national touring acts to a wider audience, something Nguyen espoused forcefully. Studio time for local musicians were free by appointment. The Lounge Act recordings would become part of LaLa and WOXY libraries, and be available for people to podcast, stream, or add to their radio stations.

Music in the Cloud?

The music locker services hosted by Amazon, iTunes and Google, the three larger companies than the others that have cloud storage, open a new vista on the future of music distribution. Are cloud based music services going to be the main business models of the future music industry or is it just hyperbole? LaLa Media’s 2009 takeover by Apple for US$ 85 million fueled media speculation as to when Apple would move into a cloud-based music service. Apple finally launched its iCloud in June 2011.

A small, Palo Altobased firm, mSpot started their music locker business in June 2010, with a difference. Without moving their entire bank cirrus-wards, they allowed customers to upload music already acquired, for use through any web browser. That meant single-slotting, leading to shortage in storage capacity, requiring allotment of space on cash terms. Here, the first 2GB are free, after which monthly charges apply on a per GB rate.

Audiogalaxy followed in October 2010, with a remote streaming service enabling users to stream music from all Windows and Macs. A free app has to be downloaded from Audiogalaxy, which displays all music files from the users’ computer in an Audiogalaxy music list. The playlists can then be accessed after logging on to audiogalaxy.com from other computers as well as from iOS and Android devices.

Amazon’s Cloud Drive, Google’s Music Beta and Apple’s iCloud followed in 2011 in that order. Though there has already been cloud based music service on the market when the majors moved in, the forerunners do not offer more than a simple music locker service due to legal problems.

  1. Online retailer amazon.com launched its music cloud service – Amazon Cloud Drive – in the U.S. on March 28, 2011. Cloud Drive allows customers to upload and store digital content (audio, video, photo) on their servers, accessed by a web browser. The stored music can then be played by the ‘Amazon Cloud Player’, which supports MP3 and AAC data formats, and by Android smartphones (but not by any other smartphone such as Apple’s iPhone).
    Amazon offers you two schemes when you log in, Unlimited Photos and Unlimited Everything, both of which offer you a 3-month free trial period. As part of the Unlimited Photos plan, you’ll also get 5 GB of space free to store non-photo files (like videos). At the end of the three month trial, you are billed $11.99 per year, till you opt out. Be careful when on the site; any accidental click can cost you big, if you hold an account with them and they have your credit card number.
    As part of the Unlimited Everything plan, you will be billed 59.99 per year after the free trial period. Standard plans and charges remain as is. The business model of Amazon’s cloud (music) service is based, thus, not only on the purchase of music – via its online music store – but also on the choice of scheme. Amazon’s Cloud Drive is only a simple music locker with a big name.
  2. Google launched its cloud-based music service “Music Beta” on May 10, 2011. It was similar to Amazon’s Cloud Drive, with a few differences: The number of songs which could be uploaded were limited to 20,000 and only US-users, who requested an invite at music.google.com were eventually allowed to use the beta version. The service was only supported by Android smartphones (version 2.2 and above) and files streamed at a rate of 320 kbps.
    The main motive for the launch of Google’s music locker was the completion of Google’s new music player app for Android devices, following Amazon as soon as possible in the cloud-based music service market and also to overtake Apple that was avowedly planning to launch a fully licensed music cloud service.
    ‘Google Play Music’ is Google’s music streaming service and online music locker. Users with standard accounts can upload and listen to up to 50,000 songs at no cost. An “All Access” subscription of US$9.99 per month permits users to on-demand streaming of any song in the Play Music catalogue and the capacity to create custom radio stations. Users can purchase individual tracks through the music store section of Google Play. Besides music streaming for Internet-connected devices, the Google Play Music mobile app allows music to be stored and enjoyed offline. Google Play Music offers in excess of 30 million tracks to buy or stream. It is currently available in 58 countries for Android and iOS devices, web browsers, and media players like Sonos and Chromecast.
  3. Apple iCloud paved the way for a new business model in music distribution and hearing. Music in such a cloud is unendingly accessible where ever you are, if online. Since Apple dealt with labels and music publishers, it provided a cloud-based music service far beyond Google’s and Amazon’s music lockers. Users need not upload their music libraries for eons, but access to music is immediate with a mouse click.
    Steve Jobs recognized that both Google and Microsoft had a notable lead in cloud technology, though they hadn’t cottoned on to translating that lead into profit. Jobs strangely remained under Apple’s tin roofs. Ergo, the iCloud is undoubtedly a super backup for iOS devices. But on the cloud computing front, it falls way short.

Ed Bott, writing for www.zdnet.com gives his current take on Apple’s cloud status:

  • Email. Way behind Google and Yahoo.
  • Productivity apps. Very capable iOS and OS X apps in its iWork suite. A non-starter when competing with Google Apps and Office 365.
  • File storage. Apple has nothing in this space, i.e., synchronization clients for iOS and     OS X for Dropbox, Google Drive, Microsoft OneDrive and more.
  • Messaging:  iMessage and its companion app, OS X Messages have Apple-only limitations.
  • Photos  iCloud syncs photos and videos from iPhones to the cloud and then to other devices. It’s possible to share those photos via the web, although the process is cumbersome.

Apple is in no danger of becoming a “devices and services” company. What it offers is fine for anyone fully committed to Apple’s hardware. The installed base of Apple hardware, especially iPads and iPhones is too big for any cloud player to ignore. That position, as Cerberus to the wealthiest segment of the PC and mobile hardware market, gives Apple an enviable position as power broker.

In a comparison of online music storage services (Cloud Music

Services), there are currently three large services—Amazon Music, Apple’s iTunes Match, and Google Play Music (see Fig. 2) with purchased songs from the associated music store not counting toward storage limits. Besides extra storage space, the main additional feature provided with an annual fee by Amazon.com and Apple is “scan-and-match”, to examine music files on a computer and add a copy of matched tracks to the user’s music locker without having to upload the files. Google provides both a large amount of storage space and the scan-and-match feature at no cost.

Fig. 3  Source: https://en.wikipedia.org/wiki/Comparison_of_online_music_lockers

Music Licenses

Music licensing is the authorized use of copyrighted music. Music licensing ensures that the owners of copyrights on musical works are compensated for certain uses of their work. A purchaser has limited rights to use the work without a separate agreement.

There are numerous types of music licenses and many complexities involved. It is advisable to consult an attorney specializing in the performance of music. Some such licenses are:

  1. Performance License: Broadcasting, in the context of music licensing, means the playback of recorded or live music for groups of people beyond what might be normally expected in a social setting. Bookstores, bars, and live music venues that broadcast music first need to obtaining a performance license.
  2. All Media Now Known License: Licensing issues are encountered when television shows or films using copyrighted music are released on Digital Versatile Disc (DVD) format for home viewing. When a song is cleared for usage on a TV show, the clearance typically only applies to television airings of the show in question. If the show is considered for DVD distribution to the home video market, the rights to the song must be renegotiated in order for the song in question to be included on the DVD. Most producers/production companies now include the rights for DVDs or “all media now known or hereafter devised.” This assures production companies of the right to re-release without incurring additional licensing fees.
  3. Live Performance License: With certain exceptions, live performances must be licensed. In the U.S., the owner of a bar, cafe, or restaurant who wants to have live music obtains a blanket license from the American Society of Composers, Authors and Publishers (ASCAP) or Broadcast Music Incorporated (BMI) to play musical selections which they control. If a license is obtained from one company but not the other, only the music from that company may be performed. The Association for Concert Bands (ACB) covers both ASCAP and BMI lists.
  4. Synchronization Licensing: The licensing of musical works to be synchronized with moving pictures as background in a movie, television program, video, DVD, etc., call for a Synchronization License.
  5. Performance Licensing: Purchasing a copy of the sheet music for a copyrighted work does not give the purchaser the right to perform the music. A separate performance license must be obtained before he/she may perform it in public in a commercial setting. Permission of the rights holder is required before the work may be published, copied, or performed in public. (There now may be two copyrights, one on the original work, and a second copyright on the “new” material contributed by the arranger.) An arrangement of a traditional song or piece of music will be protected by copyright, even if the original is in the public domain. Every new arrangement receives a copyright. The Golden Rule of Licensing: if you don’t own or control it, you likely need a license to use it. There are some exceptions to the rule, however.
  6. The Fair Use Exemption: The Fair Use exemption is an ill-defined, fact-based doctrine, decided by courts on a case-by-case basis. It has very limited applicability in the area of music performance and makes a weak defense in an infringement case. The use of a copyrighted work “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.”

Section 110 Exemptions
This exemption means that faculty may, for the purpose of instruction, do the following:

  • Show a film
  • Perform or listen to a piece of music
  • Perform, or show, a play
  • Show slides or other images

The only requirement is that the performance of the work must be part of instructional activities, not for entertainment), and the faculty member must use a legally obtained copy of the work.

The Best Music Streaming Service

The finger is pointing towards streaming being the music industry’s inevitable future. As always-connected Internet devices become more prevalent, media companies continue to push for reoccurring subscriptions rather than one-time purchases.

It does require a change in thinking for a lot of people to get used to paying for access rather than paying per item. Something you might start to notice is that all the music services are heavily invested in the idea of music discovery — their business depends on it. Why would someone continue to pay for access to unlimited music if they only listen to the same handful of albums month after month?

It can be a scary thing paying monthly and “renting” your music because it feels like once you start you’ll have to do it forever. Once you stop buying music, then you are no longer guaranteed to be able to listen to a certain song if the mood should strike you. If you stop paying, you’ll have to go back and buy all the music you found and really enjoyed. It’s a valid point, but one that will most likely fade over time as the download business decreases.

Streaming your music can feel a little like cheating. Relax, every time you press play in a streaming service, the company is paying the artist. The royalties for streaming music aren’t the same as music purchases, they can’t be mathematically, but the artists are still being compensated each time someone listens to their music. The amount can be a joke! 2.2 cents US per 1,000 streams. The more people who pay into the subscription pool, the more those payouts to artists will be.

In the market, music services are treated on personal whims. While Rhapsody still has some name recognition, it hasn’t been worth anyone’s time or money in quite awhile. The service waited way too long to treat mobile like a first-class citizen, additionally coasting on its initial success. Xbox Music is interesting, but it’s definitely geared towards Microsoft devotees who use devices like Xbox, Windows 8, and Windows Phone. If you do use Windows 8, Xbox Music is available for free, but the experience can be a bit frustrating. But then, it has a massive chunk in the huge Asian market, which is Windows dominated.

While there are legitimate concerns over which services have the biggest catalogs, it should be a very minimal concern. Each of the top-tier streaming music services looked at have between 16 and 20 million songs in their libraries (and growing).

It should be noted that some artists aren’t available to stream on any service because they, or their label, feel it devalues their music (the same reason there are still some artists in 2015 whose music isn’t available to pay to download either). Signing up for a service’s free trial and searching for some of the more obscure artists you enjoy listening to will give you an idea if one of the services won’t work for your musical tastes.

Ultimately, the ball is in your court.

References Used

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