February 18, 2008
Last.fm, Online Music Distribution, and Cross-Platform Promotion

The Web has brought discussion of crises to traditional media for a variety of industries. However, no industries have been hit harder than newspapers and music, in terms of rhetoric about Internet culture and consumption signing the death warrant for those industries as we know it.

I have written multiple times in the past about the plight of newspapers here on the C3 blog (look here and here, for instance), while Ana Domb has written multiple times about changes in the music industries (see here and here).

Last month, Ana wrote specifically about how 2007 was considered "the year the media industry broke," writing further that:

My sense is that the music industry is not broken, but it is going through terrible growing pains. It's outgrowing its parents and struggling to find its new identity. (We all know that this is a long and painful process.) Now, granted, "parents" is not the strongest analogy for the music labels, since they have NOT given birth to music, and some might argue they've done just the opposite. For the moment, though, let's consider them the music industry's legal guardians.

We have yet to find out what this new music industry will look like, but changes like the ones that took place last year will help consolidate an important shift in the dominant power structure. Much has been said about how this change has empowered the audience, and certainly Radiohead and Nine Inch Nails respond to this trend, but they also reflect the increasing power that the creators have obtained over the production and distribution of their content. This will be a long, slow and interesting struggle. And I would say that, in spite of the industry's flare for the dramatic, it will be a while until everybody knows what their new role is, what they are allowed to expect, and how they can relate to each other.

This all takes me to Last.fm, a CBS-owned music site which allows users to listen to a wide variety of musical choices, on-demand, for free, with advertising support. The positives? Through CBS's reach and access to a deep reserve of music, users can line up their own mix of music to play for free without interruption. The negative? At current, a track is only allowed to be played three times. Otherwise, users are linked to iTunes, Amazon, and other outlets to buy that song from.

According to Saul Hansell with The New York Times, the site is similar to social networking site Imeem, except that, with Imeem, the site only includes tracks that users upload.

Hansell wrote about Imeem here, writing that:

The labels are interested in Imeem, in part, as a way to promote new bands. It has an active community of independent artists who upload their music. And one of the key features of the network is that members exchange playlists with each other.

In some ways, Imeem is a descendant of Napster and other peer-to-peer networks. Members upload their own versions of songs they like and want to share. And Imeem uses software from Snocap (founded by Napster creator Shawn Fanning) to filter out tracks that labels don't want shared.

With the CBS resources behind it, Last.fm does stand a chance to be a key player in the future of music distribution, and--according to Hansell--they are working to resolve the limit on the number of times a song can be played, through further negotiations with major labels.

Over at Mashable, Kristen Nicole points out, through quoting Adam O., that "this new model, which pays artists each time a song is streamed (versus a fixed price model) will be good for artists, and may even be a comprehensive competitor to MySpace, which also allows for self-promotion, but without the pay."

Over at ReadWriteWeb, the assumption is that this is the first step for providing a cross-platform media experience. The author writes:

So we can imagine every song, every artist played or featured on a CBS property most likely will be referenced, cross-referenced, and made available through Last.fm, giving CBS another way to reach like-minded consumers who want to share their interests with others.

The more people go to Last.fm to hear what song was just played on "CSI:NY", the more money CBS and Last.fm make off advertising and residual sales. Imagine at the end of the show a text crawl noting that the music tonight can be heard at Last.fm. On the Last.fm side of the equation, there can be season-long playlists from CBS properties, conveniently cross-referenced, tagged, and shared.

I agree that it's a model worth keeping our eyes on. Thanks to C3 Alum Geoffrey Long for passing the story along.