Last.fm goes on-demand

24Jan08

As many of you know, I’m a big fan of Last.fm — it’ll be 2 years ago tomorrow since I first posted about it, and if I weren’t focussed on my own venture, there’s no place I’d rather be working. So yesterday’s announcement is definitely interesting: users of Last.fm can stream any track up to 3 times gratis, and thereafter they can either (now) buy the download or (soon) subscribe to a Rhapsody/Napster style service to continue to stream on demand.

I think the positioning of the announcement was a bit unclear, however. This is NOT a free, on-demand service like imeem or lala; rather, this will ultimately be a subscription-based, on-demand service with a free “sampling” component very much like what Napster offered a couple of years ago. In fact, Napster’s offer was (is?) actually for 5 (rather than 3) free listens before you had to buy or subscribe, and I blogged the underlying math at the time. Quincy Smith said they wanted to offer more free listening, but it remains to be seen whether the Majors will be willing to grant a much higher threshold.

Fred Wilson also suggests the price for Last.fm’s subscription will be $3, but I’m pretty sure this is just the pricing on their current premium (ad-free, personalized) radio sub service, and I seem to recall having read that the on-demand subscription will be higher. I think it’s unlikely the labels would grant Last.fm a less expensive arrangement than what Real, Yahoo and Napster get, except as part of a comprehensive deal, including upfronts (which could be the case, we’ll see).

The reasons I see a Last.fm subscription potentially faring better than Rhapsody/Napster/YMU are (1) the on-demand functionality is layered on top of a free service that is already highly successful, with a large base of users (20m registered users), and (2) the service has a core social dimension which was lacking in previous efforts.

I like Felix, Martin, Spencer and the rest of their crew and applaud their efforts to make this model work.

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