Online music may be a treacherous space right now, but there are still a handful of music startups that may be coming close to getting it right. One of our favorites is Lala, a streaming music site that allows users to put their digital music library in the cloud, which can then be accessed from any computer. And soon, they’ll be able to access every song they own from their iPhones too, without having to worry about storage capacity or syncing.

Unlike music sites like http://music.myspace.com”>MySpace Music, which largely revolve around playlists and streaming individual albums, Lala is meant to serve as a web-based music library. The site has forged unique deals with every major record label (and many indies too) that allows users to populate their online library with the music they already have on their computer (legally acquired or otherwise). Users simply install the Lala Helper app, scan their computer for music files, and sign into Lala to find their entire music library in the cloud.

From there, users can browse through Lala recommendations and see what their friends are playing. The site has a unique buying model that allows users to purchase ‘web-only’ versions of songs for a mere 10 cents a pop – a price point that is very addictive, but also gives Lala a legitimate monetization scheme beyond advertising. Users can listen to these web-only songs as many times as they want, but only through the browser – if you want to load it on your iPod, you need to pay an extra 80 cents to download it. So while Lala has been fairly impressive until this point, it has still kept users chained to their desks.

That may change soon, when Lala releases its iPhone application that will allow users to stream any song from their music library, whenever they want (provided they have an internet connection).

While some of Apple’s traditional iPods have massive storage capacities, many people have abandoned them favor of iPhones, which offer more functionality but much less space for the money (most people have either 8GB or 16GB models). And given that these devices are also used to store applications and video files, many of us find us having to pick and choose which songs we want to carry around with us.

With Lala, you don’t have to worry about that. The app streams the songs from Lala’s servers, in much the same way Pandora does. But unlike Pandora and similar radio apps, you can chose any song from your music library whenever you want.

Unfortunately, it still may be a while before everyone can get their hands on the app. Lala says that there isn’t any concrete release date for the iPhone application, explaining that it still needs work on a number of fronts. For one, the app still has obvious bugs (some text fields don’t update correctly, and sometimes a button won’t work). But perhaps more important, it sounds like the company may still have some legal hurdles to wrangle, and it also needs to fine tune its monetization strategy. Hopefully it won’t be too long – this app would be a boon for users with large music libraries, and would also offer a huge boost to the Lala service as a whole.

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

Galaxy Impact, a classic brick-break game and the first iPhone app created by Team iBokan, went on sale in iTunes App Store on Oct 27, 2008, free of charge. It had about 220,000 downloads in its first two weeks and was ranked as No 10 in “Top Free Apps” in the Game category and No 20 in “Top Free Apps” overall, before we started charging a $.99 fee for purchases on Nov 9th 2008.

Here are the details:

Galaxy Impact downloads before start charging $.99

The downloads for Galaxy Impact in its first two weeks, broken down:

* 10/27: 1,377 (the first day on sale)
* 10/28: 10,839
* 10/29: 13,110
* 10/30: 18,875
* 10/31: 18,556
* 11/01: 25,898
* 11/02: 28,390
* 11/03: 26,156
* 11/04: 18,182
* 11/05: 16,633
* 11/06: 14,883
* 11/07: 13,024
* 11/08: 10,928
* 11/09: 1,153 (started charging: 27 downloads PAID)
* 11/10: 23
* 11/11: 20
* 11/12: 1,435 (free of charge again)

So the free downloads vs for-fee downloads is about 400:1. That means for 220,000 downloads, our revenue amounted to $550. It’s obvious that there was no way we could make money out of this with a $.99 list price.

Another lesson learned: before the price change (from free to $.99), average downloads per day was above 10,000 but after price changed back to free, the average rebounced to about 1,000 per day, which continued for a long time. If we had not experimented with charging for the app, the total number of downloads would have been much higher.

Next, we decided to try advertising and updated Galaxy Impact with ads from Admob along with other new features. There was a huge spike of update downloads with a 30,647 peak of November 22, two days after the update release.

Galaxy Impact Downloads after Update

As you can see, the huge traffic for the update does not increase the number of new downloads, even if the app remains free of charge. To this day (Mar 18th), there are about 500,000 downloads in total and about 160,000 updates (one third of new downloads). Note, only updates have ads.

So how was Galaxy Impact doing with advertising powered by Admob? Let’s take a peek at the first month of the year.

Ad revenue from Admob for Galaxy Impact (Jan 2009)

The highest daily ad revenue was $16.37 (on 17 January) and right now it’s about $2.50 per day.

Here’s our monthly ad revenue, broken down:

* Nov 2008: $70.81 (11/20 – 11/30)
* Dec 2008: $236
* Jan 2009: $175
* Feb 2009: $142
* Mar 2009: $67 (03/01 – 18)

With no update or marketing, the current rate of free downloads for Galaxy Impact is about 120 per day. If we apply for-fee ratio, this transfers to about 0.3 daily downloads at a $.99 price, which leads to revenue of $.21 for us, or about 8.4% of what we are making right now on a daily basis ($2.50).

Conclusion

In the case of Galaxy Impact, we have done absolutely no marketing and did 2 updates with new features.

1. Free downloads vs for fee downloads ($.99) is 400:1
2. New downloads vs updates is about 3:1
3. If you decide to go with ad support, do it from the very beginning.
4. Updating does not help much
5. Ad revenue in the long run is higher than sales revenue
6. It’s hardly a sustainable business for most common app developers (with average apps).

Crunch Network: CrunchBase the free database of technology companies, people, and investors

For whatever reason, Apple’s iPod ends up in the middle of quite a few crimes. The latest story, however, is even more extreme than usual. Nicholas Arthur Woodhams, a 23 year old from Kalamazoo, Michigan, was recently slapped upside the gord with federal charges of fraud and money laundering after he managed to con Apple into shipping him around 9,000 iPod shuffles. As the story goes, he managed to somehow correctly guess thousands of valid shuffle serial numbers and have replacements shipped to him; once they arrived, he sold them for less than MSRP to excited buyers, all while giving Apple a prepaid VISA number that would reject the charges after he failed to send back the nonexistent “original” shuffle. It’s rather amazing to us that he was able to pull this off for so long without being noticed, but even if it works for awhile, we’ve learned yet again that crime doesn’t pay. In fact, the feds have already seized a half million bucks from one brokerage account, some real estate and a trio of vehicles. Tragic, yeah?

[Via Macworld, thanks Steve]

Filed under: Portable Audio

Scammer shuffles Apple out of 9,000 iPods originally appeared on Engadget on Sun, 22 Mar 2009 03:36:00 EST. Please see our terms for use of feeds.

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