Tuesday, June 05, 2007

La-la lands Warners deal

It's interesting that the bravest (in RIAA terms) experiments with DRM-free music are coming from the smaller of the majors, the ones without extra layers of cross-corporate synergy to worry about. So, as EMI starts to sell files with only the merest scraps of identifying data on them through iTunes, Warner Music has launched a service which allows users to listen to whole albums. For free. Online. If the listener likes, they can buy the song.

Lala.com - which hitherto has been an interesting CD swap site - will pay a small royalty (perhaps a penny a listen) everytime someone streams a track, and hopes to make its money back when people decide they like the songs so much they'll have them as a takeaway.

Stand by for someone in a major label talking sense, and only seven or eight years too late:

For Warner, the deal with Lala.com has limited risk, because the label will make money from streaming royalties. But its priority is increasing sales of music, which have declined further this year. “The evidence we’ve seen is that a lot of people want to own music,” said Alex Zubillaga, Warner’s executive vice president for digital strategy and business development. “And their mandate is to sell music.”

Mr. Zubillaga added that Lala.com was giving Warner Music a good deal of flexibility in determining how to price and bundle music. Apple, the dominant player in the market with its iTunes music store, does not give music labels those options, much to their chagrin. Unlike iTunes, Lala.com will concentrate on selling albums, which it will offer for a variety of prices based on the behavior of individual consumers.

There had to be a catch, didn't there - a confusing price structure. And what does "behavior" mean? Will you get charged more if you skip tracks halfway through the listen? If you visit on Tuesdays? If you download only songs with "sexy" in the title? At the risk of sounding like someone in an insurance advert, I want to know in advance what I'm supposed to be paying; there is no compelling reason why Slim Dusty's A Pub With No Beer should cost a different download price from Fatboy Slim's Praise You, and the suggestion that different people may pay different prices for the same track sounds suspiciously like some consumers are being fleeced.

We suspect that Warner's choice of partnering with Lala has, though, less to do with flexible pricing structures, and more to do with this being a nervous first dip into un DRMed waters. Nobody wants to lose their virginity at an all-you-can-eat orgy, do they?

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