Less than a year after unveiling what it called a "free global jukebox", Last.fm is scrapping free radio listening, except in three key countries: the USA, the UK and Germany. The site, acquired for $280m by media giant CBS almost two years ago, will instead introduce a €3 monthly equivalent fee for music streams. The site cruft, such as recommendations, interviews and social networking, remains free.
"Revenue from international subscriptions will be used to cover the cost of providing a radio service for international users", explained Last.fm's Owen Parry on the company blog. "Revenue from advertising will be used to cover some of the cost of providing service in the three countries – subscriptions are also available. While we would like to provide the same service for users of all countries – the world is a huge place and it’s not cheap to deliver music over the Internet."
Last.fm lost a fifth of its staff before Xmas as CBS digested its $1.8bn takeover of CNET.
Not surprisingly, the future looks bleak for ad-supported music. Last week SpiralFrog, the service which made front page news when Universal Music invested in it in 2006, promising free MP3 downloads, finally went titsup.
Last.fm looks particularly sorry when compared to another ad-supported service, newcomer Spotify. Because Last.fm is full of features nobody particular wants, or that other people do better, it's sprouted a fussy, sprawling UI. By contrast Spotify made the instant delivery of a huge catalogue of music its priority, and has put its resources into achieving that. As a result the Spotify interface is clean and simple. No wonder users are ecstatic.
But can Spotify survive? As I wrote last month when I reviewed the service, almost certainly not in its current form - the economics are too brutal. Income doesn't match outgoings. But there's plenty of opportunity for Spotify to add features people actually want to pay for (subscriptions for downloads you can keep, for example) or adopt a licensing model. ®