LaLa - CD trading site

It's all about the equipment

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Nate Dogg
Posts: 886
Joined: Sat Dec 14, 2002 3:29 pm
Location: Austin, TX

LaLa - CD trading site

#1 Post by Nate Dogg » Mon Mar 13, 2006 11:33 am

New CD website.

I am not sure if I buy the business model, I think Half.com, Amazon, etc... and other sites do a better job of determining the true market price of a used CD. I also have doubts if there is enough profit in such small transactions. We will see, I could be wrong.

I have a feeling that the same CDs that your see on Craiglist for a $1 or $2 will fill the inventory of this site.

I will probably keep an eye on it, but I have no illusion of finding anything special, mostly the same stuff I can find cheap at pawn shops, Criagslist, etc...

Perhaps, there are a lot of people who are not as experienced in how to find old CDs the usual steep discount places, or they don't have the time/don't enjoy it; so LaLa might serve this market. But, is it going to pay back the $9 million seed money?

Also, this site could be used as de facto CD rental system, people buy a CD for a buck (plus 49 cents shipping), rip it, and make it available again to the the pool. Nobody from LaLa is going to admit to that, but spending $1.50 to churn a CD is cheaper than spending $9.99 on a download at iTunes. They could probably monitor users for this type of behavior, but will they?

Here is the article.

Living In La La Land
Pollstar.com
Updated 23:56 PST Sun, Mar 12 2006
While used discs might run anywhere from a couple bucks to $20 or more, one company is betting that music lovers will pay $1 for someone else's CD.
What's more, the company thinks the same people will be willing to let go of their own CDs for free.
Currently in beta testing, lala.com will facilitate trades between its users, charging each person a dollar for every used CD purchased through the service. The more members, the larger the inventory. Plus, unlike iTunes, Napster and other online services that only carry CDs greenlighted by record labels and artists for digital downloading, anything that's ever been released on CD is theoretically available with la la. That is, as long as a member is willing to give it up.
Here's how it works. Users log on to lala.com and select CDs they either want to purchase or give up by clicking on buttons labeled "Want" and "Have." By clicking on "Want," you assemble a list of CDs you want to purchase, while clicking on "Have" indicates which of your CDs you're willing to give up. La la facilitates the trade by sending the giver prepaid envelopes in which to send the CD and picks up a dollar plus a 49-cent shipping charge from the receiver.
Of course, in order to purchase CDs through la la, one must also be a giver. But just about everybody has a few old CDs in the closet gathering dust, discs that others would gladly pay for if only they could get their hands on them.
Pretty neat, eh?
Investors Bain Capital and Ignition Partners thought so. They kicked in $9M in seed money to get la la up and running.
But perhaps one of the coolest aspects of la la is that the company will divert 20 percent of each sale to the artist even though current copyright rules and regs do not require any royalty payments on pre-owned CD sales.
La la was conceived by Bill Nguyen and John Cogan, who say they came up with the concept while listening to Fountains Of Wayne. Along with co-founders Billy Alvarado and Anselm-Baird Smith, Nguyen and Cogan are shooting for a virtual version of the local independent music store where music lovers gather to discuss, explore and purchase music.
But what if la la members don't have that particular CD that you're looking for? La la will give its users the opportunity to purchase a new copy if members don't list the CD on their individual "Have" lists, according to Reuters.
La la may also launch a digital download feature, and is in licensing talks with record labels. However, unlike the a la carte services, the plan calls for selling complete CDs, not individual tracks.
La la is currently signing up new users for beta testing. According to its Web site, la la will officially open for business July 4.
But why wait? Sign up for beta testing and get in on the fun. The more the merrier!
Meanwhile, we're hoping that someone will take William Hung's Hung For The Holidays off our hands (it was last year's Christmas bonus from our boss), so we can purchase a used copy of William Shatner's epic recording The Transformed Man. With la la everybody wins. We'll get Captain Kirk's stirring rendition of "Lucy In The Sky With Diamonds," and Mr. Hung will get his 20 percent. Such a deal!

JohnDyer
Posts: 87
Joined: Wed Nov 20, 2002 2:52 pm
Location: Denver CO

#2 Post by JohnDyer » Mon Mar 13, 2006 3:30 pm

Will probably be very popular with the crowd that wants to have the CD to rip to their harddrive and then send back into the system - a small price to pay, but like you said, it will probably be full of trendy pop or music that no one wants. I doubt they'll have much depth in variety (especially for the tastes of this group).
John Dyer, Denver CO

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