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CD Swapping Service Begins

La la Media Inc. is starting up a service that allows consumers to trade their CD’s for another member’s, and charging only a $1 transaction fee plus shipping. From Reuter’s, Backed with $9 million in funding by Bain Capital and Ignition Partners, La la works like an online music co-op by enabling members to trade physical CDs they own for physical CDs they want, Bill Nguyen, co-founder of La la, said ahead of the Tuesday announcement.

With 1.8 million album titles available, members trade the CDs in prepaid envelopes, much like popular mail-order DVD service Netflix Inc. operates. If a user wants a CD that they do not have a used copy of, they have the option of buying it new directly from the service.

La la Media Inc. would like to be able to offer digital downloads, but between the RIAA’s desire in general for large download fees and since they must detest the idea of the CD swapping, I don’t know how forthcoming they will be. The whole premise of the swapping is that consumers are able to transfer a legally acquired copy without having to pay any royalties or fees. You just know that the music companies will try to find a way to shut this down, but I don’t see how they can stop a trading service by people who own the product.

Posted by Jeff

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