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Last.fm Puts Pay Wall Around Streams; Except In US, UK, Germany

This story was written by Robert Andrews.
Fifteen months after it first announced the feature, Last.fm is finally introducing a premium subscription model worth its name, as it tries to generate enough money to both pay as royalties and satisfy its owner CBS (NYSE: CBS) Interactive.

The music site made a song and dance back in January 2008, when it announced users would get to stream more than three full tracks in a row under an upcoming subscription model. But the model never materialised. Today, co-founder Richard Jones confirmed Last.fm will now, from March 30, charge 3 ($4) a month for the existing "Last.fm Radio" - a catch-all term that refers to personalised, back-to-back full-track streams. But the fees will apply everywhere except the UK, US and Germany - Last.fm is effectively raising the pay wall everywhere it doesn't have a significant user base.

Last.fm gave no explanation for the change but, as UK royalty collector PRS For Music told us yesterday, with online advertising slowing, it's high time online music services started making some money if they are to pay for the songs their users play. When Warner Music Group (NYSE: WMG) chose not to renew its deal with Last.fm in June, it was reported to be partly through disappointment at the no-show of the subscription model, through which Last.fm would also make payments to labels.

With CBS having recently cut a fifth of Last.fm staff in a group-wide cull, and the full synergies of its $280 million May 2007 acquisition yet to be fully realised (Last.fm replaced CNET Download Music but features like TV scrobbling remain absent), it's likely also time Last.fm starting bringing CBS a return. Last.fm has operated a rudimentary $3-a-month subscription virtually since its inception but, with barely more worth paying for than "an attractive black icon", it was considered little more than donationware prior to the acquisition. Even at 3 a month, Last.fm will still be considerably cheaper than increasingly popular streaming service Spotify, and with a whole additional social recommendation layer.


By Robert Andrews