CBS, Last.fm create "communities around content", not just another music streaming site

During the CBS-Last.fm announcement today, CBS president and CEO Leslie Moonves said the company was looking into developing “communities around content.” “Community clearly is the future,” he said.

cbs last fm logosInteresting. What does this mean?

But first, here’s the deal: CBS and Last.fm, the London-based online music streaming site CBS bought for $280 million last May, have built a site where music fans can stream any song they want for free. Well, almost for free. The site is supported by advertising.

last fm screenWhat makes the CBS/Last.fm site so compelling — it’s being dubbed as the “world’s largest jukebox” — is that all four major record labels and 150,000 independents are participating, contributing songs and entire albums. This adds up to 3.5 million tracks from Universal Music Group, Sony BMG, Warner, and EMI, all of whom will be paid (through separate agreements) from ad revenue.

The site is also open to unsigned bands, who will share the ad revenue associated with their songs.

The process is almost too good to be true: Music fans simply go to Last.fm, which has an active community of 15 million active users in more than 200 countries. It’s best known for the song recommendation engine that tracks the music-listening habits and links them to other fans with similar tastes. Search for an artist, listen to a song, and see a small “billboard” ad on the screen while the tune plays. People don’t even need to register with the site, if they don’t want to.

Fans can listen to any song three times before they are directed to one of Last.fm’s partners, including iTunes, Amazon, and 7Digital, where they can purchase the track. And just so we’re clear here, tracks on Last.fm are not downloadable, so people cannot put streamed music on a digital music player.

last fm people recommendationsThe CBS/Last.fm approach is not completely new. RealNetworks launched a service nearly three years ago that lets users stream 25 songs per month for free. Napster, launched in 2006, lets fans stream five songs for free before they are asked to ante up the credit card. Spiral Frog, the Peter Gabriel-supported We7, imeem, and others, offer similar services.

Streaming business models, however, have had limited success.

So back to community. What’s the big deal with the CBS/Last.fm almost-free, ad-supported streaming service besides the big media-name backing and the involvement of the major record labels and a slew of indies?

As Moonves said, “Community is clearly the future.”

In existing CBS “content communities” are TV shows from CBS, The CW, and Showtime, movies from Paramount, other TV stations, CBS Radio, CBS Interactive, even the Simon & Schuster book-publishing business. And let’s not forget: CBS is the network broadcasting next month’s Grammy Awards, the music industry’s equivalent to the Oscar’s.

cbs corp announcementSo 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.

“This is promising, not only for the consumers but for the majors themselves,” IDC consumer audio analyst Susan Kevorkian told Wired. “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.”

last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

2 Responses to “CBS, Last.fm create "communities around content", not just another music streaming site”

  1. Steve Purdhm says:

    As CEO of We7, I think any move such as the Last.FM deal is fabulous, it shows that slow but continued acceptance to change by teh music industry which will eventually allow teh digital world reach its full potenial. There are still so throw backs with the 3 play limit for them being a classic one and there is still a lot of hard work to prove ad funded models. However at We7 we have hada tremendous first year acheive many things that people said we would have no chance in doing. People value music more today than any other time and people get confused between ‘free’ music and someone else pays. Overall I think teh outlook for digital if very promising, many new models will come and go but the ones that are allowed to scale will show teh skeptics teh full overall potential
    Cheers
    Steve
    CEO We7

  2. Must learn how to type teh ;-)