Lala - a P2P NetFlix for swapping CDs

We give it a whirl

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Exclusive A new Valley-based start up is updating the old idea of a swap meet for music fans. LaLa.com provides a site where you can find and trade legitimate CDs with other members. LaLa gives you a stack of cases and envelopes, and each CD you acquire from other members costs you $1, plus postage. That's as much, the company points out, as a single DRM-encumbered, low bitrate song from Apple's online music "store". And somewhat less than the price of a ringtone.

LaLa says it will set aside 20 per cent of trading revenues to create a fund to compensate artists - who because of the 'first sale doctrine' in US law, currently don't receive a penny from second hand trades.

LaLa's CEO is serial entrepreneur Bill Nguyen, whose last venture was launching the mobile email software company Seven. LaLa also boasts Yahoo!'s erstwhile chief product guy Geoff Ralston. Anselm Baird-Smith, who helped devise the http 1.1 spec and was a Distinguished Engineer on eBay's search engine - he designed its recommendation system - heads up a strong technical team. It's backed by a $9 million investment from Bain Capital and Ignition Partners.

Nguyen wants it to be "eBay meets a great record store", he told us, and said he was fed up with the cold and soulless experience of services like iTunes, which he compared to Walmart. He didn't mean it as a compliment.

"It breaks my heart. Steve Jobs could have saved music," Nguyen told us. "We want to grow the music market - not just take a tiny percentage."

Intriguingly, LaLa has set out to build relationships with the labels, and also operate as a marketplace for bricks and mortar records stores. That's going to be interesting, because LaLa and second hand stores could be really bad for each other. If LaLa is as successful as eBay, LaLa will decimate the used record store. And stores dumping unwanted inventory on LaLa will ruin the personal aspect of what makes LaLa good. We'll see.

So, what's it like?

Using LaLa.com

We've been on the closed beta for a little while now, and have found the experience both fascinating and troubling.

LaLa has set out to build a great website which makes finding music, and browsing people's "trade" lists really easy - and succeeded. Browsing people's collections is slick and fun. You can send messages to other members, add a blog, and download a plug-in which shows what you're listening to.

It's fast, and manages to be both minimal and rich at the same time - something very few contemporary AJAX websites (uh, Yahoo! Mail beta - we're looking at you) manage to achieve.

The home page looks like this

LaLa home page

When we first checked in, with only a hundred beta testers active, there was a lot of music available. It was astonishing what showed up in searches. The benefit to LaLa of course is that it doesn't have to stock this physical inventory - merely keep track of it.

Adding your own CDs was painless if they were already in the system - but some kind of filter that takes your MP3 collection could help here.

After a few minutes it became as addictive as perusing people's home collections on the old Napster used to be. (You can do this on today's illicit P2P networks of course, but you have to browse past video clips of tramps kicking each other, which are depressingly ubiquituous).

Like Bittorrent and Weed, or peer moderated boards, LaLa rewards participation - the more you trade, the more you get. But like NetFlix, it also encourages apathy. If you don't trade, you lose the habit.

The recommendation system could use some work (apparently, I'm really going to like The Beatles) as could the classification system. For example, there's tons of soul music to be found on LaLa, but there's no "Soul" section - and we found both Lenny Kravitz and the Beastie Boys in the nearest equivalent, the "R&B" section. That boy Lenny may have a lot of mirrors in his house - but he doesn't have soul.

Are we getting physical?

There are two aspects to LaLa that are really strange. Firstly, you don't trade the jewel case and insert from your CD. This is by design: the plastic flip case that LaLa provides along with the flat cardboard prepaid envelope just don't have room for it.

If you don't think these are important parts of the experience, there's a chance you might soon realize just how important they are.

For receiving a CD without the dressing that makes it a physical artifact is very odd indeed. Digital culture is very bland, and the more we're urged into a world of bits, the more important these tokens become. If someone wants a CD, don't you really, really want to send them the whole package?

So initially, LaLa looks like a great way of getting rid of the never-listened-to CDs that are taking up valuable shelf space or gathering dust in a closet. Only hundreds of trades later, you'll still have the jewel cases and original artwork just where they were. It then seems a criminal act of destruction to throw these away. When we put these concerns to LaLa, the company said it might consider allowing people to print off their own artwork or liner notes, but this was "gravy" - the USP being you were getting a CD for a buck.

Throwing an empty jewel case with liner notes into the bin seems to embody the destruction of value for which the internet so often criticized - and that's something the company is keenly aware of. So we very much hope Lala offers a "ship the Full Monty" option.

The other curious aspect is that unlike eBay, you're not obliged to ship what's requested. This leads to a lot of showboating, as people advertise CDs they like but have no intention of ever swapping. It's too early to tell what effects this will have down the line, but intuitively, it doesn't feel right.

Care to swap?

LaLa is such an intriguing idea it's weird to think it hasn't been thought of before. You'll almost certainly get better value from taking your unwanted CDs down to the used record store - but different channels have always co-existed, and if you don't live near a used store, or don't care at all about the integrity of the packaging, then LaLa might be for you. I t has the addictive quality of successful music sharing sites, and it's legitimate. It also raises profound questions about what the value of physical goods.

A public launch is a few weeks away, but if you live in the United States and want to get in on the closed beta, mail us - LaLa is making a limited number of free trials available to Reg readers. ®

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