Off in La La land

Admit it. Back in the day, you made some music mistakes. Maybe you smoked a lot of weed and bought every Dead and Marley CD you could find. Then in your angry phase, you bought Elvis Costello until you realized anger was just a ruse to croon boring pop. And then there’s all that jangly Boston-area stuff from the early ‘90s.

Those CDs have long been gathering dust in your mom’s attic, and she’s threatening to throw them out. Dumping thousands of dollars’ worth of music into the trash seems like a bad karmic move, but no used-CD store will touch them. They have enough Marley already.

Enter La La. The new Web site, launched last month, provides a legal alternative to online music-sharing sites by letting users swap their old CDs with other users via mail.

The La La process is simple. There’s no sign-up cost, but credit-card information is required to register. List the CDs you no longer want at www.lala.com. Then go through La La’s 1.8 million titles—the largest selection online, the site claims—and click on the CDs you want. When another user’s wants and haves line up with yours, it’s swapping season.

La La sends all new users postage-paid envelopes and protective plastic clamshells. Drop your CD in the clamshell, stick it in the envelope and drop it in the mail. Within two weeks, you’ll have new music. Or at least music that’s new to you. The receiver is billed $1 for the trade and 49 cents for postage. Trades are permanent, so make sure you really want Oops! … I Did It Again before you request it.

La La co-founders Bill Nguyen, Anselm Baird-Smith and Billy Alvarado have years of Internet experience. Nguyen, who founded Seven Networks Inc., is the main reason you can get e-mail on your cell phone. Baird-Smith invented eBay’s recommendation engine. The three decided to put their experience in e-commerce into something they love, music—ergo, La La.

“It’s pretty cool,” said Nguyen during an interview at a private club in New York City, with Baird-Smith. “You open your mail: Cable bill, electric bill … CD for a buck!”

Swapping can be fun but also cringe-inducing. In its rush to go live a month early, La La opened its virtual doors on June 8 without fixing all the problems that cropped up during beta testing. In what arguably can be called the Great Artwork and Liner Note Debate, multiple beta users whined that it was unfair to receive a CD without its accompanying artwork. Other users claimed that, at $1 per trade, everyone should just shut up.

In response to complaints that would drive any parent or teacher nuts, Nguyen recently announced via the site’s feedback board that a “Cover Art Only” service for 99 cents in postage could be available as soon as July 6. The CD-only option would remain 49 cents.

There are other problems, too, like not listing all the versions of a CD on the site. For example, Ozzy Osbourne’s Blizzard of Ozz has been issued twice on CD, but La La only lists the reissue. If a La La user clicks that he has Blizzard of Ozz without checking which version he’s indicating, he’ll send the wrong one. It happens, and it’s annoying.

John Kuch, La La’s director of business development, promised the kinks would be worked out soon. All available versions of a CD will be listed, and if you get the wrong one, fear not. A trade like that won’t cost you, but you’ll have to wait until another user sends the CD—and it may still be the wrong one.

However, trading on La La operates on karma, and bonehead users will get theirs in the end. La La employees have written code that tracks everything on the site: good trades, bad trades, whether a user ships recent releases or old music, obscure CDs, broken CDs or excellent-quality CDs. Your ability to trade is affected by your karma score. Ship old stuff, get old stuff. Ship the new Pearl Jam, get a recent release from your want list in return. La La doesn’t let you know the state of your karma, but if you suddenly find your active trades limited, you can be sure the algorithm thinks you did something shady or just plain stupid.

On the subject of shadiness, there is some industry concern that the La La business model fosters piracy—that users might copy a CD, keep the files and trade the original.

La La’s position is simple, if naive. “Don’t keep copies,” said Kuch. The site’s terms and conditions state very clearly that keeping copies of music you trade is a big no-no, and it will get you booted off the site if it’s discovered. (La La has an optional plug-in that tracks what you listen to in order to make recommendations.) La La already has banned users from the site for sending burned CDs, another taboo.

In reality, there’s nothing preventing rejected users from signing up under a different name, but the company is making an effort and claims record labels have nothing to worry about.

“We believe in the basic goodness of people,” Baird-Smith said. He dismissed any talk of impropriety by citing the first-sale doctrine of the 1976 Copyright Act, which grants CD buyers the right to sell or dispose of their purchases as they see fit.

Kuch added, “Have we heard from the [Recording Industry Association of America]? No. Are we on the right side of the law? Yes.”

(A spokesperson for the RIAA declined to comment about La La for this article.)

Though Kuch affirmed that early reports that La La is losing money were erroneous, there’s some speculation that La La can’t stay profitable by facilitating CD trading, if only because the CD itself may one day become obsolete. CDs currently make up 94 percent of music sales, but there’s a reason the RIAA held a press conference in June to award gold and platinum sales for ring tones: The kids are going digital.

“We’re actively in discussions with labels about digital sales,” Kuch said. “By the end of the year, who knows? You may see that.”

In the meantime, La La is doing two things that are rare, if not unprecedented, in the music industry. First, the company has pledged to give 20 percent of its revenue back to the artists whose music is traded on the site. Second, the founders have created the Z Foundation to help working musicians obtain things like health insurance.

“Most musicians are independent contractors,” Kuch said. “They don’t have the same benefits as [they would] if they worked for a conglomerate.”

All working musicians, defined by La La as “any individual who has performed live or on a recorded release in the last year and whose music-related income accounts for more than half of their total income,” are welcome to apply.

“We’re able to give back in a really substantial way because we have such low overhead,” Kuch continued. “And you get back what you put in. Karma.”

Perhaps you can increase yours by getting rid of your old stuff and helping some starving musicians. Just think how happy your mom will be when you pick up those boxes of CDs and make more room for all your naked baby photos.