all major labels to start streaming free music on last.fm

[Dean Winchester]

NEW YORK -- Last.fm, the social media site acquired by CBS last May, now lets users play any song from the Big Four record labels and thousands of indie labels and artists up to three times, for free.

At a press conference at CBS' headquarters Wednesday, executives revealed plans for Last.fm to become "the first website to offer free, global, on-demand access to the largest licensed catalog of music."

CBS president and CEO Leslie Moonves kicked off what he called a "groundbreaking" announcement by saying that the company had wondered, "Could this culture meld with our culture? And I'm pleased to say it did.... Community is clearly the future."

Then Quincy Smith, president of CBS Interactive, took the podium to announce an overview of the plan to distribute music from the Big Four major labels -- Sony BMG, Warner Music Group, Universal Music Group and EMI Music -- plus Ioda, Naxos, The Orchard and about 150,000 indie labels and bands, all for free. Each label deal is different, according to Smith. The total number of songs available now is 3.5 million, but the company is aggressively adding content, and Stiksel said it will never stop adding music. "The mission is to have every track available," said Last.fm co-founder Martin Stiksel.

"This is promising, not only for consumers but for the majors themselves," said IDC consumer audio analyst Susan Kevorkian. "Digital technology holds a great deal of promise... artist and labels can sustain relationships with consumers well past the point that they have historically sustained them."

Imeem announced a similar service last month. When reached for comment, an imeem spokesperson was still crafting a formal reaction, but told us, "imeem pioneered this model for delivering streaming full-length music on an ad-supported basis. Last.fm's news simply reinforces our view that there's a significant opportunity in this market, and that 2008 will be a critical year in development of the model."

Still, Felix Miller, co-founder of Last.fm, called the new service "the world's biggest jukebox, and it's free for anyone to use" without logging in.

Stiksel then conducted an overview of the Last.fm site, which looks much like it did before Wednesday's announcement, but with far more licensed music from high-profile artists. He said that not only does the site provide single-song, on-demand streaming (128 Kbps stereo MP3), but also complete album streams three times on a "try before you buy" basis.

"We're overlaying the content on top of the already very active community" on Last.fm, Miller said. "When I buy a CD, the artist gets paid once.... What we're doing with the model we're proposing today for Last.fm is that playback gets monetized.... If I clock 100 plays, this means the artist gets paid 100 times the money."

Users can listen to each track up to three times under the free program. Last.fm plans to set up affiliate deals with iTunes, Amazon.com and 7digital to convert users to a paid download upon the fourth listen, and will also recommend similar music -- or, you can use the expired song as the basis for a customized internet radio station. Stiksel said the radio listening page is attractive to advertisers, because people return to the screen to rate and skip songs. He also said CBS and Last.fm are working with the labels to increase the number of free plays beyond three.

Stiksel called the ads that will support the program "tiny" and said "they run alongside the music, when people are most engaged." The video ads will be targeted to where users live and what they listen to. If someone signs up without having been assigned to a demographic segment, an algorithm creates one based on how similar they are to other members in the community. The ads' volume will default to the mute position. Advertisers will come from Last.fm's previous advertisers, but the company will leverage CBS' advertising relationships as well. The network is currently reaching out to its advertisers to tell them about the opportunities surrounding Last.fm.

Every time you listen to a song on the service, Last.fm tracks it, despite the lack of a login requirement. If you delete your cookies, the site apparently won't be able to track you. I confirmed that by deleting the Last.fm cookies file within FireFox, one can listen to a song for a fourth time without even restarting the browser. When asked about the possibility of people using this trick to gain unlimited listens, Miller said he would prefer not to talk about it, but that only technically sophisticated users with an agenda would bother. (One unwelcome side-effect of the cookies being deleted could be that Last.fm loses the demographic information so valuable to the site's advertisers.)

Any independent artist can submit their music to be part of the site, and will receive undisclosed standard fees with no label deduction -- "more than double the payment artists get from commercial radio in the UK," according to Miller.

No download is required to use the service, which launches Wednesday in the United States and Europe, and in other countries soon.

At the end of the conference, the stereo started playing a ska cover of "I Fought the Law and the Law Won."