CBS banks on Last.fm tunes
EmptyCBS Corp. unveiled its vision for social music network Last.fm on Wednesday, positioning it as the largest free, ad-supported online music service that allows for full-length on-demand song and album streams.
CBS Corp. president and CEO Leslie Moonves is betting that the move will make the digital music service another solid ad contributor in his company's portfolio.
"It is clear to us that communities built around great content are increasingly driving traffic and revenue online," he said. And CBS promised that Last.fm would provide advertisers with "many unique opportunities to reach a highly targeted and engaged audience."
Quincy Smith, president for interactive at CBS Corp., wouldn't specify the expected financial windfall that the new format of Last.fm could bring for CBS but implied that the site's makeover would not have occurred if it was not expected to be substantial.
Under deals with music giants Universal Music, Sony/BMG, Warner Music and EMI as well as various independent labels, Last.fm is now offering full-length tracks and albums for a total of more than 3.5 million songs.
At a launch event, CBS Corp. and Last.fm execs touted this as the largest licensed music catalog for on-demand use in the business. "Adding such a tremendous collection of content to Last.fm will help it grow by leaps and bounds," Moonves predicted.
Users are limited to listening to each ad-supported track a maximum of three times before they are prompted to purchase it from one of the site's e-tail partners — iTunes, Amazon.com and 7 Digital. Martin Stiksel, one of the site's co-founders, said Last.fm plans to expand the number of partners in the near future.
But the company also plans to change the economics of online music for artists.
Last.fm now offers the individual user artist recommendations, concert information and music videos based solely upon which recordings the user chooses to listen to.
A key new feature that is now available is the "Artist Royalty" arrangement, giving rising recording artists that have not signed with a label the advantage of uploading their own music and gaining revenue directly from Last.fm each time a user listens to one of their tracks.
"We're building a platform to help redesign the music economy, enabling artists and labels to earn revenue according to how people listen, rather than how they buy," said Last.fm co-founder Felix Miller.
The new version of the site went live Wednesday morning in the U.S., the U.K. and Germany. The service becomes available worldwide in the coming months.
CBS acquired Last.fm in May for $280 million from co-founders Stiksel, Miller and Richard Jones, all of whom have remained on board.