Although I hate to jump on the whole “Day The Music Died” thing — which I think is a little over the top — I find it interesting that while a whole bunch of Web radio companies, including Yahoo Music and Pandora, are turning off their streams in order to protest the increase in licensing fees for Web broadcasting, Last.fm has decided not to, which has caused some consternation in the blogosphere, including this post at TechCrunch by Duncan Riley.

snipshot_e47fptthesl.jpgRiley says that the Last.fm decision could risk a backlash from users, and in a follow-up post at TechCrunch, Mike Arrington raises the issue of whether the company’s decision has something to do with it having become part of CBS, the media conglomerate that bought it for $280-million not too long ago. Last.fm, in a blog post in its defence, says: “We do not want to punish our listeners for our problems, period.” The company argues that royalty rates are a fact of life, and that because it is based in the UK it has had to deal with them for a long time, etc. It says the industry should fight for fairness, but that turning off Internet radio even for a day “is just plain wrong.”

While the idea that users should come first is an appealing one — and companies like craigslist.org have certainly prospered by making it a mantra — Last.fm’s argument seems a little disingenuous. If the doubling of radio royalty rates takes effect (Stan Schroeder at Frantic Industries has a nice overview of the issues, as does the SaveNetRadio site), small streaming companies could go under. That would obviously leave Last.fm in a pretty sweet position.

I’m not saying that’s why Last.fm made the decision it did. I don’t know the company or the founders, so I can’t judge. I’m just saying it looks kind of fishy — especially when Yahoo and RealNetworks and others have joined the protest. Turning off the stream for a single day doesn’t seem like a huge issue to make a point, and I would bet that Last.fm’s users would probably support the move.

(Incidentally, Pandora has been inaccessible to Canadians for more than a month, after the company turned off access to Canadian IP addresses because it couldn’t afford to reach licensing deals with all the record labels for Canada as well as the U.S.)

About the author

Mathew 2430 posts

I'm a Toronto-based senior writer with Fortune magazine, and my favorite things to write about are social technology, media and the evolution of online behavior

4 Responses to “Last.fm’s non-silence speaks volumes”
  1. I’ve read that Last.FM post just now, and pity I haven’t done it earlier, because I have something to say about it.

    Their explanation of why they’re not participating in the “day of silence” is satisfactory to me. They’re a UK company, with a wider scope than just online radio, etc.

    But, there’s a big problem in that blog post. Nowhere does it say that the increase in price is a bad thing. In fact, they use the good old RIAA lingo: “artist make a living out of this; we want to pay the artists; it’s only fair”. Well, artists were paid before, too – now they’re just paid more. Hell, why not triple the rates, then? Why not give all your revenue, and whatever change you have in your pocket, to the artist?

    Because it’s not about the artists. The RIAA has created an artificial economics of scarcity, and thus they can set the rules as they please. Why doesn’t bread cost 100 dollars? Because no one would buy, that’s why. And someone else would make cheaper bread. But the RIAA is arbitrarily setting the price of their “bread” and suing everyone who doesn’t comply, while at the same time controlling the media which create the demand. It’s all much better explained at the many great articles over at Techdirt.

    My point is that Last.FM did not only fail to support their fellow internet radio companies; they fail to criticize RIAA’s bullying and arbitrary price-setting; in fact, they seem fine with it, which is a much worse offense.

  2. As a long term subscriber, I would have been very upset if last.fm would have switched off the stream today.
    And certainly after weeks of server problems, I would have cancelled my subscription.

    Is it a dubious move? Maybe, but I think there’s an interesting comment from Russ in the by Duncan linked forum thread
    We’re unable to participate because it may compromise ongoing licensing negotiations. I’m sorry I can’t be more specific, it annoys me too.

    Could there have been a backlash for last.fm by participating? Last.fm since months tries to agree new deals with labels, deals to bring old features (such as combined tag streams) back. And also to obtain every song ever released.
    Objecting royalties IMHO doesn’t seem the good way to reach those goals.

  3. Rod from Techfold said something similar recently – that the sale of last.fm to CBS meant that the music service would have to relenquish control to the more traditional ‘big business’ concerns of CBS. While it’s impossible to know if that was a factor in the decision, it’s certainly well within the realm of possibility, despite the claim of a potential ‘loss of royalties’.

    Still, I too think that the day of silence is a bit much – seems a bit like teachers going on strike: the people in power aren’t the ones who are ultimately put out.

  4. That’s a good point, Stan. And Franky, it’s interesting that Russ would make a comment like that — it seems obvious that they are unwilling to poke the elephant while they are trying to negotiate licensing deals. Which I suppose is a business reality that Last.fm has to face.

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