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Jam Session

A band of entrepreneurs is changing the way people listen to music.
September 1, 2007
URL: http://www.entrepreneur.com/article/182972

Vital Stats>> Bill Nguyen, 36 (r.); Billy Alvarado, 34; Anselm Baird-Smith, 39; and John Cogan III, 36; of Lala.com in Palo Alto, California
Company>> Online music company
2007 projected sales>> $10 million

Tuned in>> Introducing a modern business model to an age-old industry is no small feat. So when Lala.com unveiled plans that would revolutionize the music industry--to the tune of a projected $140 million in incurred licensing fees over the next few years--it created a lot of noise. By offering users generally unheard-of options, such as free music library hosting, direct iPod downloading for a small fee and the ability to listen to entire tracks for free, Lala.com is marching to its own beat. And by paying music labels a penny every time a track is played and pushing the sale of CDs and digital albums, the online music company is doing the unprecedented: partnering with music labels to help introduce alternative revenue streams.

Good vibrations>> But it's more than just increasing music sales. The team hopes to unite people and change the way they interact through music. On the site, which launched in June 2006, users can view others' music preferences and see how many people have bought a certain album. And Nguyen envisions music becoming far more interactive in the near future. "Other forms of entertainment have gotten so much more creative," he says. "We have to do the same thing with music."

Making the band>> Between the four of them, Nguyen, Alvarado, Baird-Smith and Cogan are right on key. Respectively, they are the innovator, the coordinator, the tech guru, and the general counsel dealing with contracts and partnerships. Many skeptics question the risky venture, but even that is music to Nguyen's ears. "It's a healthy process when you begin a business," he says. "It really wouldn't be good if everyone said, 'That's awesome.'"