So much for that. After a flurry of initial excitement around Lala.com’s plans to launch a streaming music service to iPods and PCs, they just shut it down after only one month.
According to the UK’s Pocket-lint, Lala.com claims the service is being withdrawn because its servers couldn’t handle the number of users. Of course, that’s a lame excuse. Pocket-lint speculates that the real reason lies somewhere between the fact that the company didn’t get enough support from music labels, despite Warner Music Group’s involvement, and the exorbitant licensing fees.
“Lala.com had committed to pay a cent to the record companies per song played,” said reporter Amy-Mae Elliott in the article. Doesn’t sound like much until you add it all up: “Licensing fees were projected to reach over $150 million in the next 2 years.”
Lala.com stops free music streaming service [Pocket-lint]