Raja Jasti’s Blog - Renaissance Thinking

Lala pulled off of a double coup with its deals to power Google and Facebook. It is not easy to manuever your way through the trecherous world of music labels, search engines and social networks come away with deals. Congrats to Lala. BW has the behind the scenes look at the deals.

Earlier today, I spoke with Lala Media founder Bill Nguyen as he stood in the lobby of Warner Music’s headquarters in New York. The always animated Nguyen was more animated than usual—and for good reason. He’d just finished a day when the world learned that his little-known company was going to be the engine behind new digital music offerings from Net behemoths Google and Facebook. He wasn’t just excited about the magnitude of the possibilties, but by the fact that none of the news was supposed to happen so soon. “It was all totally unplanned and unexpected,” he said.

Here’s what happened. He’d gone to New York for an entirely different reason: to show music label executives and reporters a version of Lala’s music service designed as an app for Apple’s App Store. But then news broke, first by TechCrunch, that Google planned to use Lala’s service as a back-end infrastructure for a new music search feature to enhance its overall search offering. Suddenly, Nguyen, who declined to comment on the Google rumors, was no-commenting his way through interviews as reporters asked for details.

Then things got wilder, when Facebook suddenly pushed up its announcement that it, too, planned to unveil a Lala-based music plan. Rather than stick to its plan to begin a limited roll-out to a small percentage of Facebook users later this week, suddenly the social networking giant confirmed its overall plan. “All of a sudden, it was like ‘we were launching right now,’” says Nguyen.

Mind you, he’s not complaining. He thinks traffic from Facebook alone could increase the number of songs doled out from Lala’s servers by an order of magnitude above the 5 million or so songs it currently delivers each month. While he won’t comfirm the Google deal, it’s pretty clear it’s coming. Google has sent out invitations to announce an Oct. 28 event at a historic Hollywood concert hall to announce a music-related offering. Judging from the invitation, Lala is a part of the news.

All of this represents a quick culmination of many months of deal-making by Nguyen and Lala CEO Geoff Ralston, a former Yahoo executive. Their pitch has been that there needed to be a return to basic economics when it comes to music. Rather than using music to sell hardware (a la Apple) or to sell advertisements (a la iMeem, MySpace, Spotify and others), they argued that consumers would buy music if it was easy and affordable to do.

Lala’s model is to let consumers on the Web listen to any of the eight million songs in its database for free, but just once. After that, they could opt to buy a streamed version of the song, dubbed a Websong, for $.10. Or, if they wanted to listen when they werent online, they could pay $.99 for a regular MP3 download.

But since the masses weren’t beating a door to Lala’s servers, the company needed to land a Google or Facebook to achieve critical mass. Now, it has both. And both companies seem to have inventive plans that could well have mass appeal. Facebook plans to let people buy songs (either those Websongs or the pricer MP3s) for friends, from its virtual gift store. Nguyen envisions a time when Facebook users will habitually buy friends or family members a song on their birthday, on holidays or on other occasions. “Why not give people something they’d actually want, rather than a virtual carnation,” he laughs. And he sees the phenomenon getting viral, as song purchases show up on millions of Facebook status updates. “Once someone gives you a song, all your other friends will know. And some of them will say, ‘oh, of course Id like to send you a song for your birthday, too.’”

Neither Lala or Google are confirming their plan. But if the many press accounts are correct, it is similarly intriguing. Once a Googler enters a query in the Google search bar, they’ll get a link that lets them actually listen to the song, as opposed to just getting the usual collection of lyrics sites, Wikipedia entries and the like. (Not all of these songs will be doled up via Lala. According to reports, some will come via iLike and possibly other digital music services.) Here are screenshots, courtesy of TechCrunch.

Whats it mean for Lala? Nguyen says the company will get a majority of revenue from sales made through Facebook. He says its similar to the cut app developers get from Apple, which is 70% of revenues. Facebook declined to confirm this, saying that it doesnt disclose financial terms of its gift offers.

Regardless of what the terms of the deal with Google turn out to be, Lala is likely to grow far more rapidly than in the past. And Nguyen doesn’t sound concerned about Lala’s ability to make a profit on the larger revenue base. “We’ve always been a company that invested heavily in the engineering, but we’ve never lost money on the music itself.”

Google should have had a play in music long time ago. Baidu anyone! Facebook botched iLike deal and let Myspace get it. Lala is the big winner here. Don’t forget about iLike which is now part of Myspace and has a similar deal with Google.

Google seems to be taking a page out of Apple’s playbook. Yesterday there were reports that google will be selling their own android powered mobile phones. Today there is news that Google will be offering its own music service in partnership with iLike and Lala.

Google will partner with iLike and LaLa for their new music service, we’ve learned. And the announcement date is Wednesday, October 28, 2009.

iLike was recently acquired by MySpace, so the new service may involve them as well.

From information we’ve gathered from sources, the new service will be integrated into Google search. Users will be able to stream songs directly from Google via partners iLike and LaLa. Additional information around the music query will be provided to users as well (presumably any relevant results from YouTube as well as information already available in Google’s existing music search – example). One source said that Google will organize music searches in a way very similar to the way they do public company stock searches today.

Users will also be offered the opportunity to purchase songs for download, we’ve confirmed.

Both iLike and LaLa provided limited streaming services today. LaLa lets users stream a song once, then a user either has to pay or only get a 30 second clip. iLike has some full streaming, some 30 second clips. MySpace Music has full streaming rights from all four major labels.

I think it is a bit too late to offer a me too sevice like this.

Orli Yakuel has a comprehensive guide for enjoying music on the web.

Music plays a large role in our lives. Since the web now plays an even bigger part, combining the two together has become unavoidable. The greatest thing about this powerful duo is that you don’t need to spend a lot of time searching for music you like  — just use this nifty guide list and you’ll find just about everything you need to enjoy hours of good music. The sound quality changes from service to service, but overall, it’s good enough for regular web usage.

Please note that this is a list of services that you can use over the net without the need to download anything to your computer. This is why I’m not listing any P2P software: i.e., Spotify, as well the fact that most of us can’t really test it or use it for all that matter.

Music Recommendations:

Pandora is a service that can be used only in a specific locale, this one being within the U.S. Luckily, I had the chance to test the service when it was first released and became available to everyone. Launched way back in July 2005, the project had been in the initial testing phases for five years prior to launch date. Pandora recommends music to you by matching similar musical attributes. All you really need to do is choose an artist or a band you like, and Pandora will do the rest. Pandora delivers high quality 128Kbps audio streams, offering recommendations similar to the artists you have chosen. Pandora’s player looks like a radio, you can open up to 100 stations and navigate through them quickly. Registering for Pandora will provide you with a free account (advertising-supported). Free Pandora accounts will play up to  40 hours of music for free per month, you also have the option to pay 99 cents for unlimited listening hours for the rest of that month, or pay $36 to upgrade Pandora for one year. If you want to download music from Pandora, you can do it through iTunes or Amazon. You can see our past Pandora coverage here.

With almost 3 million unique visitors a day, Last.fm is one of the most powerful social music communities on the Web today. Like Pandora, the service allows you to enjoy music that you like, but unlike Pandora, Last.fm analyses what you and your friends listen to and like, and then suggests more music based on that analysis. When you recommend music to a friend or you tag it, or you write about it, or simply just listen to it - you shift the song’s importance on the site, and will in turn get recommended to more people. Based on the music you’ve already listened to, Last.fm will recommend new music you might like, as well as suggest other users with a similar music taste to yours, which you might be interested in friending, and you can also easily communicate with them. If you live outside the U.S., U.K. or Germany, you can listen with a free 30-track trial or subscribe for a low price of $3/month for unlimited radio streaming. (Launched in 2002!)

This is how BlogMusik, looked in 2006, and this is how Deezer (formerly BlogMusik) looks today - pretty impressive change, don’t you think? The French-based service is one of the largest and happens to also be a very successful music recommendation search engine. Once registered here, you can create your personal profile and reach the Deezer community. You can create playlists, send messages to your contacts, leave comments, add artists and albums to your favorites, and more. But here’s what I like the most - The SmartRadio, which is an intelligent radio that automatically generates 3 hours(!) of continuous listening based on one artist - completely free. Priceless! You can see our past coverage of Deezer here.

I think the first Adobe AIR application that I ever tried was Finetune. Finetune provides you with the most interesting new playlists of related music from your choice of artists. Besides the site’s community where you can browse, listen to music, create a profile, connect with other users and more, Finefune also has some cool feautures to complete their suite, and each tool gives you an extraordinary music experience. Take for example the Finetune Wii project (which can be played also over the web), it’s a great sight and sound for the eyes and ears. Just enter an artist’s name and Finetune will create a playlist with similar music that will play for hours. Best of all it’s free, and you also get an iPhone, Facebook and a Desktop app that all sync with your music playlist, no matter where you play it from. You can see our past coverage of FineTune here.

Also worth mentioning in this same topic group are, of course: Ilike.com (acquired by Myspace), and music.strands.tv

This is just a part of her article. Please checkout her entire article for a complete look.

Imeem, the free music streaming service, gets new round of funding.

Insert your favorite cliche or idiom here: Imeem may have dodged a bullet. Or has risen from the ashes. They have nine lives. Or my favorite: they may have pulled a rabbit out of the deadpool.

The point is, they aren’t going to be closing down any time soon, say sources close to the company. And for a free music streaming company, that’s really saying something.

Weeks ago they were on the ropes, near the end of cash and with crushing venture debt obligations threatening to shut them down entirely. No one was interested in buying them or putting in more cash with big music label royalty commitments already past due.

Then we heard whispers that they may have a plan to build a profitable business. And apparently they’ve convinced at least their current investors to back that plan with more capital.

CNET’s Greg Sandoval reported earlier today that the company may have raised new funding (he used the “dodged a bullet” idiom, by the way). We’ve confirmed that the company has raised a new round of financing from existing investors. There’s no word if Sequoia has put new money in, and we’ve been told the amount raised is small, likely in the single digit millions. But it allows iMeem to make payroll and keep the servers running.

More importantly, the company has forged new deals with the music labels, we’ve heard, that help it break away from the crushing pay-per-stream model that’s impossible to cover with advertising.

Imeem has renegotiated its label deals to allow it to focus more on a revenue per user goal than a pay per stream. Revenues from downloads and ringtones will offset streaming rates, which moves the relationship much closer to a revenue share than a pure licensing deal. It may just give iMeem the room it needs to get to sustainability.

I am glad imeem survives for now. We need more innovation in the music industry and imeem is one of the innovative companies out there.