We reported earlier on the LaLa CD trading service. The service has under 100,000 users who trade 3-4 CDs a month. A public beta service is coming this summer.

Some in Hollywood are not amused. Says Ted Cohen, senior vice president of digital development at EMI Music, "This is a nudge-nudge, wink-wink way to get around the law. It makes it easier for people to copy CDs and steal music. Why would the music industry do anything to encourage a company like this?"

So now the music industry wants to fully control not only digital downloads, but also the physical CDs that people have long thought they owned.