James Delahunty
7 Mar 2006 15:32
A new service called La la aims to make it possible for consumers to pick up used CDs for just $1. This is possible and also legal because the discs are in fact "traded" by members of the service. The company is backed by $9 million in funding from Bain Capital and Ignition Partners. It works by allowing members to trade CDs they own for CDs they want. The trade is made in pre-paid envelopes, similar to how online DVD rental services operate.
If members can't find CDs for trade, they can also buy the new CD from the service. The company is also looking for licenses for the sale of digital music. A spokesman said the company expects 30% to 40% of its revenue to come from trading and the rest to be made up of CD sales through a deal with CD distributor Baker Taylor. The company claims that it is protected against legal action from the Recording Industry.
They contend that the owner of a CD can transfer a legally acquired copy without permission or payment of additional royalties. The company will be paid $1 from a member when they receive a CD and an additional 49c shipping charge. La la said it will set aside 20% of trading revenues for recording artists.
Source:
Australian IT