Westlake Village (CA) - Before today's age of downloadable music, people used to sit around in old-town record stores discussing their favorite music amidst dusty album covers. In many cities these stores are a distant memory, but Bill Nguyen is trying to bring them back, albeit in an online format.
Nguyen's lala.com website mixes myspace-like social networking with ebay-style music trading and buying. Members pay $1 to trade CDs with each other, but can also look at what other members are listening to, post pictures and form a "circle of friends." Nguyen also told us in a conversation that he is donating 20% of generated revenue to artists.
The Lala.com website serves mainly as a clearinghouse and arranges music CD trades between members. People post in their "want list" a list of CDs that they want to receive. Once a CD is received, the member can keep it for as long as they want. CDs that members are willing to give away appear in a "have list." However, the list doesn't obligate members to send them out. Lala.com matches available CDs and for each trade and charges a $1 service fee as well as $0.49 for shipping. Users signing up for the service receive a starter pack of CD holders and pre-stamped shipping envelopes. A member's first trade is free.
Nguyen told us that he came up with the idea for Lala.com shortly after his son was born. "After graduating from college, I stopped listening to music for several years, but when my son was born, I got back into listening music and found some great independent bands," says Nguyen. The catchy Lala.com name didn't come from a highly paid PR firm, but was some of the first words that his son spoke, and he adds, "At 4 to 5 months old, he would say la la la, so I used it for the name because it's catchy."
Currently, Lala.com boasts 1.8 million available albums, which Nguyen says is about 10 to 15 times more music than what Apple's iTunes offers. But having that much content is worthless if people can't find what they are looking for. "You gotta help people find stuff," says Nguyen and that is where the social networking comes into play. Members can set up their own profiles, which can be viewed by other members. These profiles include what music the member is currently listening to and what they think about different songs. In addition, blogs and pictures can be posted, giving lala.com a myspace-like atmosphere.
This social networking, Nguyen says, will bring back the record store environment where people sit around and talk about music - something that is missing from the current itunes/ipod generation. "When you look at the iPod commercial, it's kinda sad because you see a blacked out person, surrounded by color, listening to music, by themselves," says Nguyen.
Members can give a star rating to each other and the music they listen to, which Nguyen says is similar to Ebay's buyer/selling ratings, but he draws a clear distinction with the famous auction site. Ebay members leave feedback about each other, but usually it's short and merely says, "A++++ buyer, a pleasure to deal with. Lala.com members are encouraged to post blurbs to each other and Nguyen says, "Can talk about whatever they want."
"We got a lot of ideas from Ebay, they have a tremendous resource in their members, but it's almost like the company is afraid of people talking to each other," says Nguyen.
Independent bands could also benefit from Lala.com's social networking. These unknown bands create great music, but usually have a hard time getting promoted in the modern music distribution market that is controlled by large record companies. "It's not that no great music is created, but it's that great music isn't exposed," says Nguyen. He hopes that members will talk with each other to help the smaller bands become more visible and sell songs.
Much like Google's "do no evil" philosophy, Lala.com tries to be a site of "good karma." The company promises to donate 20% of their revenue directly to artists. Nguyen says that this is "an absolute first", but hasn't fleshed out the exact details yet. "We haven't finalized the direction, but we have the intent to send money directly to the artist. For now, that money will be put into escrow," says Nguyen.
Currently, Lala.com is in beta and only accepting members that have been referred by other members or sponsored links. Lala.com will start selling downloadable music in the future and Nguyen told us that he expects 60% of his revenue to come from those sales, with the remaining 40% to come from music trading. How many CDs has Lala.com shipped so far? Nguyen declined to state the exact number, but did add, "easily thousands of CDs."
A public launch of the service is planned for 4 July of this year.