Warner Music Group (NYSE: WMG) will offer its music catalog online, for free listening. A start-up, Lala.com, wil be the portal through which consumers access the songs. Customers who want to download the music will pay $6.50 to $13.50 per album.
The new offer is very different from the approach being taken by most of the industry, lead by Apple (NASD:AAPL), which only allows customers to have access to entire songs for a fee. The new service will work with the iPod.
Lala is paying music companies money for each album, whether its is purchased or not, so the company says that it will lose money for some time.
Pricing for albums will be based on several factors including overall demand and and the content that a user already has in his or her music library.
While the new Lala.com program is novel, it appear to be more complex than a Rubik's Cube. That tends to make the prospects of success for most consumer products fairly low. But, good luck in the meantime.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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