Last week CBS owned Last.fm announced that they would stop streaming songs on demand. They’ll also stop hosting videos for on demand streaming. Instead, according to the Last.fm blog, they’ll focus on connecting listeners to services that provide “jukebox-in-the-sky” on demand services, such as Spotify, MOG, and Hype Machine for songs, and VEVO for video.
Last.fm will also continue its personalized radio station streaming services, which provide listeners with the ability to interact, but not request specific songs.
This seems to be another step in CBSRadio’s 2010 journey to profitability in the streaming space. After a few years of streaming everything everywhere, this year CBSRadio is fine tuning its streaming business model and brand identity. Not long ago, CBSRadio began blocking its non-US listeners from streaming in order to control streaming and royalty expenses.
This move last week indicates that CBSRadio intends to focus on what it has determined are Last.fm’s core competencies. “Our scrobbling data shows that, for some time now, people have been using multiple music services and devices, then coming back to their Last.fm profiles to answer the question “what should I hear next?” and to see / show off all their listening united in one place.”
Some recent research has shown that free on demand streaming services are bad for online music sales. Here in the US, the record companies have blocked Spotify from entering the market with their free on demand service by refusing to license it. Instead, Spotify will likely turn to a monthly subscription model like MOG.
The new vision for Last.fm is perhaps even broader than it was: “our vision is for Last.fm to efficiently connect any user to ALL of the relevant streaming options in their country for every track we know about, as well as being able to personalise listening preferences Last.fm-wide.”
This seems to me like a smart move for Last.fm. CBSRadio has identified the best strength of Last.fm in that it connects listeners around and about music. They can do that, provide channel streaming services, and leave the tricky on-demand stuff to other services. It’s actually what Google Music is doing with Pandora and a few other services, except that Last.fm will be providing its own streaming option as well. Which Google Music is not doing (yet).
MySpace Music will run instream audio ads sold by national Internet radio sales company Targetspot. According to reports, the audio ads began running last week for advertisers like Turbo Tax and Office Depot. The ads are inserted after a listener hears one song, and can be followed by a complete album or up to 100 songs on a playlist without another interruption.
Targetspot has announced that this is an exclusive deal that adds MySpace Music’s audience to a network that includes AOL, CBS, Yahoo!, Slacker and Live 365.
Since MySpace Music’s launch in September 2008, unique visitors to the music.myspace.com subdomain have increased 190 percent — growing from 4.2 million unique visitors to 12.1 million in June 2009. Year-over-year traffic to the URL has increased 1,017 percent. Since June, MySpace acquired social music site iLike, and later added imeem to its platform as well. MySpace Music was an announced key partner in Google Music’s music discovery platform.
This is great news for CBS backed Targetspot, and for the Internet radio industry. Last fall Pandora announced that they were beginning to air instream audio ads. It’s important for the development of a successful business model for Internet radio that key platforms like Pandora and MySpace Music contribute to creating that business model by running audio ads and creating more and better opportunities for advertisers on their platforms.
Late friday the New York Times reported that Apple had acquired online streaming music service Lala. Lala is a service that allows listeners to either buy and download songs for 79 and 89 cents, or stream the songs an unlimited number of times for 10 cents.
Apple obviously was not interested in the music download portion of Lala’s business, since they already have iTunes, the leader in that marketplace. What this acquisition gives them is a streaming platform, for listeners who prefer streaming music on demand rather than downloading and transferring music to personal devices.
Streaming music has become increasing popular with the growth of connected mobile devices. The growing popularity of streaming music from mobile devices has spurred interest in on-demand streaming from a music cloud that can be accessed anywhere from any device and is easier than downloading music and syncing with multiple devices. Some believe that cloud based streaming will eventually replace music downloading.
Apple appears to be at least hedging its bets with Lala – on the one hand, promoting cloud based streaming to replace downloads would hurt iTunes song sales, but give them a place in the on-demand streaming game.
Lala recently announced deals with Facebook and Google Music which promise to grow traffic and awareness of the service. The service had been reported to be in trouble financially. No word on the price that Apple paid on the deal.
News Corp owned MySpace will purchase independent online music service Imeem, in a deal which is reported to be $1million in cash. Imeem has been in financial trouble for a while, and has run through an estimated $30million in investor dollars.
Among the investors, all four major record labels, although earlier this year Warner Music wrote off its investment in the service. In 2007, Imeem became the first ad supported on-demand online music service to negotiate deals with all four major labels. Those deals included equity which made partners of the four major labels. MySpace also has partnership deals in place with the four major labels.
A few months ago MySpace acquired online music service iLike, with 50 million registered listeners, for a reported $20million. Comscore estimated that Imeem had 16 million unique visitors in September. It’s impossible to compare these two numbers except to say that it doesn’t sound like Imeem is a lot smaller than iLike to me.
MySpace now owns two of the five online music services that announced partnerships with Google’s new music platform. The way that works is that Google drives traffic to partner sites who play the music and pay the royalties.
Recently Spotify delayed their US launch due to problems negotiating a license for ad supported on demand streaming with the record companies. Plug that info into the fact that Imeem was about to get acquired by MySpace for so little, and it’s easy to understand why Spotify is meeting with some opposition. Seems like the record companies want to limit their exposure on the ad supported revenue model…