Switched On: Lala sells access to a song for a song

Each week Ross Rubin contributes Switched On, a column about consumer technology.

If has its way, the Web song will do to the MP3 file what the MP3 file did to the CD. The maverick music website, which began as a CD trading site and moved into Internet radio, announced an ambitious plan last year to license the catalogs of the four major music labels as well as those of many independents. It would provide unlimited listening to its members in the hopes of stimulating buying. Listeners would pay only when they wanted to transfer music to their iPods; Lala had even developed a way -- since abandoned -- to transfer music directly to Apple's portable player from its website... circumventing iTunes.

Lala eventually got its licenses. But somewhere along the way, the promise of free unlimited listening proved too good to be true, How it now works is that any song you don't have on your local PC but which Lala has made available online in its clean, ad-free user interface can be listened to for free, but only once, after which it must be purchased. One option for purchasing is the the "web song," which is essentially access rights to a track that you can stream indefinitely, but cannot download.

The benefit, in addition to not having to manage a library of files, is the price -- a mere 10 cents per song or even less when bought as part of an album. And in a nod toward its original philosophy of encouraging "try before you buy", Lala will credit the price of the web song toward the purchase of the MP3 file. Purchased MP3 files are then added to your iTunes library just as they are when music is purchased from the Amazon MP3 store. But even though they can't be downloaded, web songs will have plenty of company with your other tunes.

That's because Lala can also integrate web songs into your online library with the digital music you already own for streaming. Lala uses music fingerprinting technology to scan your iTunes library and make most or all of its songs available online in a matter of minutes without uploading the actual songs thanks to its licenses with the labels. It will even enable online access to songs protected with DRM such as Apple's Fairplay. This represents the ultimate triumph of the MP3 locker functionality that sank years ago. And if you have a free listen to a song on Lala and later decide to obtain the music elsewhere (as a from iTunes or via a ripped CD), Lala will recognize the addition and no longer prompt you to buy the track.

The web song idea fits squarely between the two main models of offering legal music online. It is strange to hear Lala executives talk excitedly both about ownership -- which has been the mantra of the iTunes a la carte sales model -- and access, which has been championed by Rhapsody and other subscription services. Unlike with those services, there's no monthly fee to pay to maintain access to music available online, but if Lala fails, so might access to your songs. Lala asserts accurately that solutions for accessing the Internet from practically anywhere will continue to improve dramatically over the next five years, but it's asking for your money now. So the company is embarking on a variety of efforts to improve access to web songs on the go, such as an iPhone application it's developing.

Lala also shares with Rhapsody and other subscription services the challenge of trying to communicate a new form of music consumption to consumers used to acquiring either CDs or digital music files that reside on their hard drives. A rough equivalent to the web song is Rhapsody's $12.99 Rhapsody Unlimited plan, which provides unlimited listening to music online but does not allow transfer to portable players (that costs $2 more per month). For $12,99, you could buy the equivalent of about 10 albums per month on Lala.

Most consumers would probably spend a lot less and cherry-pick songs the way they do on iTunes. That said, they would lose some of the fluidity of exploration that subscription services provide. Web songs will provide an interesting laboratory to explore whether the challenge with music subscription services has been concern over permanence in accessing music (the terms) versus simple distaste for subscriptions (the business model)

Another open question is whether consumers, if they adopt web songs to any extent, will remain satisfied with online access or use them as a gateway to buying MP3s. A hybrid model is likely to evolve but, if Lala is to penetrate the mainstream, it's better off pitching the web song as a way to sample, aligning itself more with the better-understood iTunes model than the less familiar subscription-based "access" that breeds skepticism. It's certainly a good fallback until Lala's wireless broadband utopia reaches deep into planes, trains and automobiles -- at which point the company can change its tune.

Ross Rubin is director of industry analysis for consumer technology at market research and analysis firm The NPD Group. Views expressed in Switched On are his own.