LOS ANGELES (Hypebot) – Warner Music Group has invested $20 million in an experiment by LaLa.com to offer 10 cent song streams from all four major labels. The label group also agreed to advertise LaLa via 25 million CD inserts in exchange for a greater share of ownership according to entrepreneur Michael Robertson. A dime buys unlimited web streams of a track and new users get 50 free.
COMMENTARY: WHAT WAS EDGAR THINKING?
It's time that Edgar and Lyor surrounded themselves with people that actually…
understand today's consumer. Any 15 year old would tell them that they are making foolish bets.
Who will pay 10 cents to stream a track when they can do the same thing for free via imeem? Napster also offers limited free streaming, YouTube has the video and if you don't mind bending the law you can grab it free on Songza. And last year WMG lost $18M investing in the Bulldog Entertainment Group, whose failed business plan was selling $3000 VIP concert tickets.
Lala deserves some credit for ongoing experimentation, but WMG only seems intent on burning cash.