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[Nvyseal]

images/news/generic.jpgBill Nguyen creator of Lala.com launched in June 2006 as a membership service that facilitated CD swaps. The site lets music fans list the CDs they own and the CDs they want, and then it arranges trades. Each transaction costs $1.75, which pays for a nifty Netflix-like envelope, 75 cents in shipping, a roughly 20-cent honorarium deposited into a trust fund for artists, and, of course, a fee for the middleman. (Nguyen says he kicks something back to the performers because he values the artistic community. Or maybe he just doesn't want to get sued by musicians who feel they're being screwed.) The arrangement exploits a loophole in copyright law: While distributing duplicates is verboten, it's perfectly legal to trade your own property. (And there's nothing to prevent Lala users from ripping a copy of a disc before they send the original off to someone else.) The site hummed along nicely enough, and in February 2007, Lala quietly added CD sales to its offerings.

Later this year, his new company, Lala, will begin streaming any track or album the user selects, for free, betting that the chance to explore the sonic landscape will get listeners excited. As they take in artists and genres they might otherwise never hear, music fans are going to want to own the songs, Nguyen says — and Lala will be right there to make that possible, via whatever channel and format the customer prefers: downloading tracks, trading discs, or even (gasp) buying the CDs. It's a model he believes will revive the music industry.