Last.fm Announces Subscription Based Service
Web services like Last.fm are hard pressed to find ways to monetize their inventory to even come close to the bills for the server structure, administrative and development teams, bandwidth and everything else that is connected to their service.This is especially true for services that stream media on their websites as this usually results in heavy traffic.
Last.fm have now announced that they will start a subscription based service for a large part of their user base which will go live on March 30, 2009. Users not living in the countries United States, United Kingdom or Germany will have to pay a subscription fee of $3 per month if they want to continue listening to Last.fm radio. All other parts of the website remain freely accessible for anyone.
Users not accessing from the three countries listed get a 30 track free trial before they cannot listen to the radio streams anymore unless they subscribe to the service. It is unclear if that 30 free track trial resets each month or if it is only available once. It should be made clear that this does not affect song previews or full tracks that are listed on the website.
Nothing will change as well for existing subscribers. The Last.fm blog post where the announcement got posted is full of criticism about the move. One of the main questions asked is why those three countries are exempt from the fee.
The reason is ad revenue next to a strategic decision which are considered key markets. Advertisement simply pays less if a user is from India, China or South Africa compared to users from the mentioned key markets. It is an economic decision, and while certainly bad for many Last.fm users, the only feasible move according to Last.fm to keep the service going.
It still remains unclear why Last.fm made the decision. Most users who expressed their opinion think that either the Recording Industry or CBS has something to do with it. If the Recording Industry was the culprit it is most likely because of licensing fees while CBS might want Last.fm to run profitable or at least even.
Update: Last.fm posted a followup on the announcement, and the company confirms what I thought was the reason for the change. Ads are simply not feasible in many parts of the world to cover the operations of Last.fm's radio offerings.
I’m using the Last.FM only as my music statistics service.
I don’t like streaming services at all because of poor quality of content delivering (may be it’s because of slow or busy connection, but it’s poor anyway). mp3-player is the best radio – I said it in earlier 2000s.
So, it seems that nothing will change for me.
I am pretty much sure that they are now going to loose much of their user base.
I would think that they do not have such a huge problem with that if they consider running a profitable business more important than being the site with a large user base. If I would run a business like that I would prefer to be profitable unless some big *** corporation was looking for a service like mine on the market. Seems that a large user base does increase the sales prices during such transactions which is actually the opposite of how individual webmasters do business. They look at how profitable a website or service is and make their offer based on that and to a lesser extend on the potential it has because of a large user base.
To sum it up. A service with 100k users that pay $3 each month or bring in $3 each month because of advertisements is attractive while a service with 1m users and advertisement earnings from only 1-10% of the user base might not.
Wise decision from Last.fm crew. If not, their business will go dodo.
You can just use a VPN/proxy to register under a German or USA account, and you’ll get free access to everything :D
Bye-bye to LastFM from Belgium! We had a great time with each other. I would have thought that they already made sufficient revenue on more and more annoying ads, though. Pity…
Sounds like an april’s fool to me.