Lala.com is launching a revolutionary new iPod-compatible music store that could be a stroke of Silicon Valley genius.
As it’s all in Beta stages we're slightly woolly about the full details but the main selling point for consumers is that essentially you will be able to use the store to stream music for free.
Lala.com, until now an on-line CD swapping service, is going to be offering the advert-free music portal where you can listen to unlimited tunes for absolutely nought.
The hope is that listeners will also become purchasers – the site is going to be selling DRM-free tracks from the Warner Music Group and are in talks with other record companies.
To prevent illegal distribution, downloads will only be possible to an iPod and the songs downloaded directly into your iPod, bypassing your computer's hard drive completely using Lala.com's patented plug-in.
The risky part comes with the site's financial agreements - Lala.com has committed to pay a cent to the record companies per song played. Licensing fees could reach over $150 million in the next 2 years.
"We believe over the next 2 years we might lose $40 million", founder Bill Nguyen told Reuters.
"We expect up to 70% of people will be freeloaders just listening to the music but around 30% will be buying music", Nguyen said.