Buy Web-Only Songs On For $0.10

Posted Oct 21, 2008

Lala Media Inc. is bringing a new idea to the digital music market.  Downloading each song will cost less than $0.99, but the catch is that you can only listen to music when connected to the web.  The cost per song is $0.10, but you cannot put it on your iPod.  Lala’s new idea is backed by the four major record labels and 170,000 indie labels.

If you want to download music on to your hard drive, then it costs an additional $0.79.  The hard drive download is DRM-free and beats the standard price of a single song serving on iTunes.  

“I was so tired of hearing about all the compromises you have to make in order to make money,” stated Geoff Ralston, CEO of Lala.  Ralston is referring to alternative methods of monetizing a service besides embedded advertising clips or paying a monthly fee.  Ralston was previously chief product officer at Yahoo! 

Lala also has a Facebook application where users can embed artist tracks on their profiles to share with friends.  After buying a track for $0.10, it will appear in a user’s Lala library within 10 seconds.  This new strategy comes at a time where MySpace Music recently launched and iMeem relaunched with an advertising partnership with the major label companies.  

Within the last month, The Webcaster Settlement Act passed through the House and Senate, thus making it more affordable for web-streaming radio services to pay royalties to the major label companies.

Lala has about $3 million in the bank to keep their business afloat in case this idea flops.  Lala took in about $9 million Series A in funding from Bain and Ignition around September 2007.