So I’m using this new service, that MC Caples turned me onto called LaLa…which to my mind, upon initial inspection…is deeply flawed…meaning…while elegant, I don’t see the business model as usurping the iTunes Music Store (ITMS) anytime soon. Here’s why.

I can stream any of their 7 million songs once. Then I can choose to pay .10¢to “add” this song to my permanent online collection…but I can’t download it…so it’s a “cloud” collection of songs…” and then there’s the MP3 download option…compatible w/the iPod or Zunes of the world…for more or less the same pricing as the ITMS. So apart from my ability to listen wherever I am should I have forgotten my iPhone or MacBook Pro (not likely)…I’m still going to need to download the tracks and manually add them to my ITMS library. Strike one.

No iPhone app as best as I can tell…now if they had one…I’d be a lot more inclined to use this regularly…but still, am I going to eat up battery life to stream a collection I would prefer to own? Maybe to check out new music…oh but wait…I’m already using Pandora…which to date, is a far superior intelligent agent when it comes to suggesting music. And yes, you guessed it…they have an iPhone app for streaming. Strike two.

Ok, the silver bullet I’m sure for some people (Hellweg I’m talking to you…) is the price. Here’s the thing here…If I’m willing to pay .10¢ to “add” this song to my permanent online collection, I’m probably willing to ante up the remaining .69¢…and I’m sure that’s the idea…however by confusing the pricing structure w/this option…they loose momentum…I know Arrington and co over at TechCrunch are excited by the technology…and again as elegant at as the LaLa player is…beating the iTunes store purchase integration, preview functionality, music management, encoding and playback will be LaLa’s biggest difficulty…and one I think many others have tried w/similar models only to find themselves wandering in the digital music forest. Strike three.

Anyway, the coolest thing about the tool, and don’t get me wrong…it is cool…may be the ability to embed a preview of an album into your blog or Facebook profile. Will certainly help drive interest in new music…and I’m sure membership for LaLa, whether it results in increased revenue for LaLa remains to be seen…hopefull it will benefit artists…

UPDATE: Ok, I stand corrected…LaLa does have an iPhone App…but it’s not out yet…once it ships…I’ll try it and get back to you.