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Going ga-ga over lala.com

In the long-raging battle between record producers and music consumers, the rights of artists are as often ignored as much as evoked by Big Studio interests. The studios appeal to consumers, saying that downloading without paying for music hurts the artist and will, ultimately, stifle creativity.

In the great food chain of the music economy, artists are typically the lowliest of creatures, paid pennies to the studios' dollars.

For their part, consumers love music and the artists who create it. The vast majority will buy and trade music to discover new talent and when they find a band they like, they're usually willing to support the artist. If only the system really worked that way.

That's the issue that serial entrepreneur Bill Nguyen was mulling over after taking a break from his last venture, Seven. The result of that mulling, LaLa.com, rolled into wide-scale beta last week, and with it came a library of 1.8 million CDs available to be traded for just $1 each. That's a library listing twice the size of Amazon.com and, the company claims, equal to 15 WalMart stores worth of music.

The trading on LaLa.com works a bit like Half.com. Members of LaLa list the CDs they have and are willing to trade. They also list the CDs they'd like to have. LaLa matches the lists and extracts a $1 service fee for the effort.
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That's all well and good for consumers like me who can refresh a library of hundreds of CDs with new artists. Turns out it's good for artists, too. Modeled after Charlie Chaplin's United Artists and Motion Picture Relief Fund, the company's Z Foundation receives 20% of each trade to support working musicians. The company estimates the non-profit foundation will receive between $10,000 and $50,000 each month, depending on consumer trading volumes. (That figure also gives you a clue as to the ambitions of Nguyen for the growth of the company.) Initially, the Z Foundation will provide health and dental care for artists who can't otherwise afford it.

Chris Shipley is the executive producer of NetworkWorld's DEMO Conferences, Editor of DEMOletter and a technology industry analyst for nearly 20 years. She can be reached at chris@demo.com. Shipley, has covered the personal technology business since 1984 and is regarded as one of the top analysts covering the technology industry today. Shipley has worked as a writer and editor for variety of technology consumer magazines, including PC Week, PC Magazine, PC/Computing, and InfoWorld, US Magazine and Working Woman. She has written two books on communications and Internet technology, has won numerous awards for journalistic excellence, and was named the No. 1 newsletter editor by Marketing Computers for two years in a row. To subscribe to DEMOletter please visit: http://www.idgexecforums.com/demoletter/index.html.

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Copyright 2006 IDG. All rights Reserved

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