Major Labels allow Free Streaming [Archive] - The Diamond David Lee Roth Army

Panamark

01-23-2008, 06:57 PM

SOCIAL music network Last.fm has struck a deal with major and independent record labels to allow fans to listen to their favourite songs on demand and without payment.

The free service is being launched in partnership with the four major music companies, as well as over 150,000 labels and artists.

When fans in the US, Britain and Germany search for an artist on the Last.fm website, they can now stream the artist's song for nothing or pay to download an MP3 version of the song via Amazon.com.

Under the free streaming scheme fans can listen to each song on the website up to three times before being urged to purchase a copy, Wired reported.

Last.fm said the streaming service would be funded by advertising revenue, which is shared with the music companies.

The move comes nearly six years after Last.fm first started reaching out to music companies to license songs to stream on its site.

"They wouldn't even take our calls back then," said Last.fm co-founder Martin Stiksel.

"But our motto to always do the right thing by respecting artist copyright has helped us in our discussions," he said.

A source familiar with one music label's dealings with the network said because Last.fm was now backed by major media company CBS, it had a "leg-up" in discussions. CBS paid $US280 million ($321 million) for Last.fm in May last year.

Terms of Last.fm's deals with the music companies were not disclosed, but the source said Last.fm would pay a "per-play" fee or a percentage of advertising revenue depending on which was higher. The source said Last.fm also paid an advance.

Vivendi's Universal Music Group, Sony BMG Music Entertainment, Warner Music Group and EMI Group own the rights to around 70 per cent of recorded music globally. Sony BMG is jointly owned by Sony Corp and Bertelsmann.

London-based Last.fm has more than 15 million active users in over 200 countries and until now has been best known for its song-recommendation system, which tracks users' music-playing habits and link them to other fans with similar tastes.

Users of the site also build communities or networks around their favourite artists, similar to those seen on social networking sites like Facebook and MySpace.

Free music streaming or internet radio sites have had varying degrees of success in obtaining affordable licenses from music companies. The sites, typically small start-ups, have also been burdened by hefty royalty fees payable to the music industry both in the US and in Britain.

Mr Stiksel said Last.fm's primary role as a music community website meant that it typically had a higher number of page views than a pure webcaster such as Pandora. Pandora said it would close its UK service this month due to high royalty fees.

A higher number of page views by a website's users usually means more advertising revenue.

CBS has said it hopes to build new communities for online videos with Last.fm that will include its own archive of hit shows as well as non-CBS videos.