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Yes, the $0.10 price tag should be understood as what it is: the right to stream a song an unlimited number of times from the cloud. This makes sense for people who mostly listen to music when they're wired at work or at home. But as devices like the iPhone and Android phones increase our ability to connect on the go at high speeds, we'll be increasingly enveloped by the cloud and able to access our content (almost) anywhere.
You also overlook that Lala scans your iTunes library and allows you to access your music that you already own for free online. They first scan your music and match it to content in their databases, and then they upload any non-DRM music that they didn't have into your account. In other words, Lala is anything but restrictive: it puts your music you already own into the cloud for free, and gives you a cheap way to buy new music for cloud-based access. For an additional price -- combined with the 10 cents, still cheaper than iTunes -- you can download the MP3 of what you've purchased. Where's the restriction? I only see freedom...
Also, have you had an experience of a song streamed from Lala being of dubious sound quality? I've only been using it for a few hours, but so far it matches Pandora in quality and to my ear, I haven't experienced any major quality issues.
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How is it restrictive? What are you not comprehending? You mention restrict/restriction/restrictive several times in your post. There's nothing restrictive about lala.com. Just pay the standard price for the full download, just like itunes or amazon, and you're good to go. What are you missing? Or, why are you sidestepping this fact? Kind of silly and pointless. To talk about restrictions where there are none.