Lala and the Transitioning Music Market

There has been intense discussion about the changing aspects of the music industry in recent years, particularly the transition from CD’s to digital singles, ringtones, video games and emerging musical markets. Yet another agent of transition has emerged, called lala. Lala facilitates CD trades, taking a small transaction fee in the process. The copyright law aspects appear to be relatively straight forward on their face. CD owners are allowed to sell their physical CD’s under the “first sale” doctrine. You bought it, you can sell it. But, what happens when someone buys a CD, sticks it on their iPod, then sells the CD? What happens when a person puts their entire collection of CD’s on their iPod, then trades for an entirely new collection? You can see the problem. The ease at which recordings can be pirated and reproduced beyond the scope of the copyright owner’s rights continue to expand.

Legal aspects aside, the market value of each recorded song in the traditional market is diminishing. The ease of piracy has simply driven the market value of a recorded song downward. Song downloads are $.99, and that price is likely to fall. A recent article about Allofmp3.com, a Russian quasi-legal download site offers another example of the declining market value of a recording, legal or not. But, there is at least some sunshine at the end of the tunnel. The benefit of a recorded song (sound recording) is that it can be reproduced and repackaged at very little cost. Enter the new markets. Ringtones, video games, background music and recordings as promotional materials for live shows have all emerged to fill the gaps left by traditional CD sales. So, repackage, repackage, repackage!