From the Reuters coverage:
Lala.com, which allows fans to trade music discs for just $1, plus shipping, pledges to give a fifth of its sales to all the musicians, including lesser known session studio players, involved in the making of CDs exchanged on its site.
In a move that is certain to stoke controversy with music promoters, the founder of the Silicon Valley start-up said Lala will circumvent traditional copyright and royalty payment systems to compensate identifiable working musicians.
The site works something like an eBay auction exchange as it encourages consumers who sign up for the service to list all the CDs they may want to exchange as well as ones they would be interested in receiving.