Michael Robertson


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How the New Lala Service Operates - A Deeper Look

June 8th, 2007

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I did some research on Lala by actually using it and watching what is happening on the machine and network connections. Here are some of my findings. I hope they are factual. If I am wrong on anything, please let me know so I can correct it.

Note: I think everyone knows this but I will say it for full disclosure. I am CEO of MP3tunes which is an online personal music locker that some would say is competitive with Lala's new service. (Although after reading this you might change your mind.) I also built a service while CEO of MP3.com called Beam-It that would load music into personal lockers if you had possession of the CD. (We were sued by music companies and found guilty of copyright infringement in a landmark legal case.)

Lala has made Mac/MSWin software that runs within your browser but requires a traditional software download and install. After installation it scans your computer's iTunes or 'My Music' directory for files. It uploads these files to an online locker. But it does quite a few curious things.

It will only upload files that it matches in advance with the Gracenote database. If it doesn't have a match it skips the file. (It skipped about half of my files.)

The files it uploads it converts to 64k mono aac files before uploading. (Yes you read right mono.)

For many files that i presume it already has in its database, it simply makes a copy available in your locker and skips the upload step. In one 50 song test it only uploaded 14 songs but all 50 songs were available for playback.

Given the 3 above steps it appears to the user that uploads are happening very quickly. If you browse the web locker interface it commingles the remote and local (skipped) files if you are on the same computer you uploaded from. Only when you go to another computer and install the required software to play songs (no linux), will you discover that all the songs are not in a locker.

You can browse and play songs from other people's lockers. You can even add them to your own locker.

Some songs (appears to be Warner artists) can be downloaded into iPods. These will have a different color connotation in the web interface and are 64k mono.

All of this raises some questions for me:

Does anyone want to listen to am quality music which is what Lala provides with 64k mono? (Maybe people on a cell phone on a bus?)

Is it a useful music locker if it only includes a portion of your music?

Do 64k files have any value as a backup?

Will they expand their support to other devices beyond iPods?

If the music locker has only a portion of your library, has low quality copies of little archival value, and only works on iPods doesn't that negate all the value of a music locker?

Have they negotiated a license with all the labels for this?

If not, how can they avoid the fate of MP3.com's Beam-It service? (my old baby which required users to have a physical CD.)

What is the legal premise they are using to be able to load lockers from a digital database? (I have heard speculation that it is the DMCA and they will claim a user is submitting the initial file and therefore they are immune from copyright claims. I guess this is not that different from YouTube which gets an initial copy and then gives copies to everyone else who wants it. But using the same logic could I take user submitted files and make bootleg cds to sell at the swapmeet?)

For the copies they are loading to iPods of songs from their database (which users do not own), are they planning on paying publishers their mechanical fee?

Will lawsuits rain down from major labels, publishers and even individual artists like James Taylor and Billy Joel as happened with MP3.com?

Will publishers and labels press Lala on these issues immediately or let them queue up a few billion in statutory alleged copyright infringement to maximize their leverage?

If it goes to lawsuits, in what jurisdiction will it end up? The tech friendly west coast or media friendly east coast (where the MP3.com precedence can be referenced)?

Were the VCs that invested aware of this business model before they put their money in? (Lala's previous business was CD swapping for $1.)

Who is Lala's legal counsel and can they compete with the media companies copyright experts?

These will be fascinating questions to have answered over the coming months that will be relevant to the digital music business.

MP3tunes offers a personal music locker, but it operates quite differently than Lala. For comparison purposes I'm including a table listing some of the notable differences.

	MP3tunes	Lala
Cost	Free (limited availability)/$40 per year	Free
Files loaded into locker	All	Partial - Gracenote Recognized
Bitrate	Up to 256k	64k mono
Upload bypassing	No	Yes
OS supported	Mac/MSWin/Linux	Mac/MSWin
Browser playback	Yes. Requires Flash	Separate install required
Public Streaming of Lockers	No	Yes
Copy songs from others lockers	No	Yes (Warner Music artists)
Hardware supported	iPod (via iTunes), Logitech Squeezebox, Tivo and Nokia n800 (See: mp3tunes.com/screenshots)	iPod direct
Media Manager Integration	Winamp and iTunes (See: mp3tunes.com/screenshots)	None
Music sites with instant loading to locker	AnywhereCD, eClassical, Kahvi	None

-- MR

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