Lala to launch free music on demand service
There's just one problem. It costs money to stream audio on demand. A lot more than internet radio stations have to pay to stream music, even if new royalty rates take effect this summer.
In order to offset the costs, Lala hopes to sell CDs through its service. The theory is that visitors to the site will be music fans who are willing to pay for the music they like. But the average user will have to buy one CD per month in order for Lala to break even, that just doesn't seem too likely.