So… no more FM, then?

Modest British online music service Last.fm was recently bought by American corporate giants CBS. Did something bad just happen?

Last FM

I’ve long been advocating that artists and record labels submit their material to Last.fm as a way of connecting with the kinds of audiences that might be interested in their music.

I’ve also scored a lot of points personally by recommending the service to friends and colleagues as a way of hearing and discovering music. Somehow, they associate the pleasure they get from hearing music they didn’t know they liked with the person who told them how to find it. Bonus.

I’ve always entertained this notion that Last.fm was three guys in a garage in London. You’d be amazed at what Music 2.0 offices really look like. But now they’ve been bought by CBS for £140m — making them the largest ever UK Web 2.0 acquisition.

My initial responses were twofold: ‘Bloody good on them’ and ‘Oh, that’s probably a shame…’.

I got in touch with Last FM‘s Christian Ward to see if I could find out what the deal was… and to try and figure out if this is still a good proposition for New Music Strategies readers: independent music businesses, artists and entrepreneurs trying to leverage the online environment to make money from music.

So… no more FM then? Are you guys claiming the death of radio?

The name Last.fm is really about ‘the last music destination you’ll need’.

Music on the web is so fragmented – you go somewhere to listen, somewhere else to read a biog, somewhere else to buy tickets – and we want to bring it all together in one place.

It’s not really about killing radio – people are always going to want to hear their favourite DJs at breakfast or whenever.

Last.fm is really about putting listeners in control, in a way that traditional radio never can.

Can you tell me a little bit about where Last.fm has come from?

Last.fm grew from an idea co-founders Martin Stiksel and Felix Miller had when they were running an online record label at the end of the ’90s. They wanted to find a way to promote the artists they’d signed by recommending them to fans of similar artists.

Concurrently, the third co-founder RJ was working on Audioscrobbler, software which tracked what you played on your iTunes, allowing you to find new music to listen to through analysis of your listening habits.

So they were all working towards the same idea, Martin and Felix from a record label/artist point of view, RJ from the music fan’s perspective. The three of them came together in 2003 and the sites were merged.

The similarity to radio is only really superficial. What exactly does Last.fm do?

At its simplest, Last.fm can recommend you new music based on your listening habits. In fact, it can be even simpler than that – just go to the homepage, type in your favourite band, and Last.fm will start playing you similar artists.

Once you’ve signed up as a user, though, you can take advantage of a host of features, from events recommendations (find gigs based on your established taste) to widgets for your MySpace and Facebook pages (your personal radio station, your charts, your bespoke playlist, and so on).

Last.fm is often spoken about in the same breath as Pandora. Explain the difference.

Pandora is quite old-fashioned in a way, because it relies on a team of backroom boys to make slightly clinical analyses of songs – it’s a very ‘top-down’ experience, as users have to rely on these boffins to make the right decisions.

Last.fm’s recommendations are drawn from the actual listening habits of our 20 million users, constantly being updated and refined, which can only improve as more people join the site. Plus we offer a lot more than Pandora: a platform for unsigned artists, personalised gig listings, and so on.

Our competition is really MySpace.

Where does all the music come from?

Last.fm has partnerships with Warner Music Group, EMI, The Orchard, IODA, (in negotiation with Sony and Universal also) to provide Last.fm users with full access to the biggest music catalogue of any web radio platform, which includes over 100,000 directly contributed tracks for free mp3 download that have been uploaded directly by 22,000 labels and over 100,000 artists.

How does Last.fm deal with complexity of tastes?

On a basic level it works like this: say you like a number of artists who include Daft Punk, Belle & Sebastian, and Dead Meadow. There’s another person who likes those bands too, and also listens to Gruff Rhys – as you don’t, Last.fm recommends Gruff Rhys to you.

The more you listen, the more refined these recommendations get. And the more people ‘Scrobbling’ to Last.fm, the more data we accrue to aid these recommendations.

With 20 million active users, even if your taste ranges from Beethoven to Black Sabbath, there will be other users online with similarly eclectic listening habits to help us recommend new stuff to you.

Why the delay on the Facebook application… and how come it’s just a list of played tracks? Surely there’s so much more you could do interactively in that environment…

We simply weren’t given the heads-up! And it’s not just a list of played tracks, it’s your personalised radio station. There is much more we can do, and we are working on it as we speak!

Stay tuned, basically.

What royalties do you pay? Is there anything particularly controversial about the amount you are currently paying?

Can’t really go into the specifics of what we pay, but since day one we’ve always made sure that we’ve worked with labels to support artists. The online licensing and royalty situation is in constant flux so we’re always negotiating it seems!

But we’ve always been straight down the line and not stepped on anyone’s toes, and made sure artists get paid.

Pandora has cut off most international listeners, ostensibly because of proposed internet radio royalty price hikes. How will these affect Last.fm?

We’ll be okay because we’re more than just web radio – we’re a social network as much as a radio platform. The royalty rate increase is undoubtedly something of a retrograde move by the industry, but we’ll survive.

You offer a free service. Why would anyone pay you money to listen?

The subscription service we offer gives users extra features – no ads, the ability to see who’s been looking at their page, and extra personalised radio. There will be more subscription features to come.

How can New Music Strategies readers (ie: independent artists, record labels, promoters, small and innovative music businesses, etc.) use Last.fm?

The artist & label side of Last.fm is very exciting I think.

Upload your music and it gets recommended to people who are into the kind of music you’re making. We target your tracks based on the similar artists you specify when you add your music, and then as they get listened to your songs are promoted throughout the community.

None of this adding of endless friends and sending out spam emails begging people to listen. Your music propagates through the system organically (provided it’s good enough and people are listening of course!).

If you want to give your tracks a bit of a push you can buy a Power Play campaign, where you take one of your tracks, provide us with a list of artists you think are similar, and we promote that track to fans of those artists. You get real-time stats on how many people listened all the way through, skipped it, or said they loved it.

And obviously you can add links to your page so listeners can buy your tracks and albums.

A Power Play campaign sounds a lot like payola in the radio industry…

Power Plays are essentially advertising. Instead of us selling ad space in the audio stream, we sell Power Plays. We make listeners aware as the tracks are playing that what they are listening to has been recommended by the artist’s label.

With payola the listener is unaware, hence the essential illegality of it.

We’ve all heard of CBS, but we have some decades old notions of what they’re all about. Who are they and what do they do?

They’re a media powerhouse with some fantastic content, from footage of the Beatles and Elvis on Ed Sullivan, right up to the Letterman show today. They’ve got a TV arm (they’re behind CSI), the revivified CBS Records, and they’re one of the biggest radio operators in the States. Among many other things!

So is CBS content going to dominate the listener recommendations now?

Absolutely no preference is given to any one artist over another on Last.fm. We will continue to treat all artists equally, with no one getting preferential treatment – the unsigned artist will always be as potentially powerful as the major label supergroup on Last.fm.

Then why have they bought Last.fm and what do they plan to do with it?

They bought us because we’re a great team producing the leading online music platform! But they also understand that they need to leave us alone to carry on doing what we’re doing.

Any exciting changes we’re going to see to the site or the service?

There’s lots of stuff in the pipeline.

Pretty soon Last.fm will be able to instantly pull in listening data from your iTunes when you sign up (the last two weeks recently played tracks, say) and start giving you recommendations straight away, within minutes of you setting up your profile.

So you could sign up to Last.fm on Friday and find a new favourite band and a gig to go to by Saturday – and maybe even someone to go with!

We’ve got more exciting video stuff on the way, more widgets, and more music being uploaded all the time. Check the blog for news.

How long till we see Last.TV?

Videos are being uploaded to the site all the time – independent artists can add their own vids now too.

Last.TV is on its way but I can’t put a specific date on it right now.

Finally, what’s the culture like at Last.FM? How has the buy-out affected that? Have you all become corporate lackeys?

Everyone’s really positive about what happened, but from a day-to-day perspective nothing’s changed.

We did get a box full of CSI caps the other day, but that’s about it! We’ll be carrying on as normal – only now we’ve got the support to make Last.fm bigger and better.

_________________________

Christian Ward‘s online music blog is called A Song A Day.

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7 thoughts on “So… no more FM, then?

  1. mikhail alexandrovich says:

    what do i have to do to get my music on last.fm again?

  2. Sylvain says:

    Kioskradio was built on a similar model in France in 1999. However the website had to come down for various (both legal and bandwidth-related, even if it only accepted content from labels and artists who had given their authorization in the first place)

  3. Still no clear reason why CBS purchased. There must be something they are not telling us because the answers given are just not that compelling. No real answers to the Internet radio fee increase except “We’ll be alright.” I know a lot of Last.FM users that are ready to jump ship if the radio thing goes away and are pretty nervous right now. I wish there was something here to make me feel more comfortable with their future.

  4. Darren Landrum says:

    The one thing I can think of is that they’ll change the Terms of Service for Last.FM to say that they have an unconditional right to do whatever they want with your content, which means they can sell it and not give you a cut. YouTube’s change in its TOS did something very similar, which caused a bit of a stink but hasn’t seemed to put a huge damper on anything.

    Such clauses in the TOS agreement are usually there as a “CYA” point so the service can do what they need to with it (like broadcast it over the Internet, which is what Last.FM does), but they also tend to open up possible abuse of the content provided by users.

    I’m sorry if this seems narrow-minded or paranoid on my part, but when it comes to a major corporation where the short-term bottom line is all that matters, I no longer put anything past them.

  5. Kimmo says:

    I like Last fm and the way the service is built, but I have to say that this is 100% bullshit:
    “What royalties do you pay? Is there anything particularly controversial about the amount you are currently paying?

    Can’t really go into the specifics of what we pay, but since day one we’ve always made sure that we’ve worked with labels to support artists. The online licensing and royalty situation is in constant flux so we’re always negotiating it seems!

    But we’ve always been straight down the line and not stepped on anyone’s toes, and made sure artists get paid.”

    This is not true. Last fm did not pay anything to artists or labels, at least prior to the claimed Warner / TheOrchard deals. Neither did they ask permissions from anyone to add music to their site. The whole system is built on a huge copyright infringement. But, as it looks now after the CBS deal, it was a risk worth taking. Then again, the lawsuits usually come AFTER you have the money, not before (see Youtube / Viacom).

  6. conti says:

    I’m sure the initial investors are rubbing their hands with glee!

  7. Anthony says:

    Kimmo, FYI: the only way Last.fm has included music in the service is either by:

    - the band/label uploading it and making it available for others for full listening or free download

    - including music in the radio stream, where it is subject to DMCA (and the UK equivalent of that compulsory license) rules for radio, which say pretty much any music is fair game as long as you comply with a few rules and pay the royalties/% of revenue.

    Where’s the bullshit?