Last.fm reveals £2.84m loss – bulk of users still in UK, despite CBS ownership

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Last.fm, the UK-based music startup acquired by media giant CBS in 2007 for $280m (£140m), made a loss for 2009 of just under £2.84 million ($4.45 million), reveal new accounts for the company. The loss posted in 2008 was £17.11 million, reflecting the high costs of streaming music, which the company has now cut. It just goes to show how expensive streaming can be…

Financials published on the UK’s Companies House show the company ended last year with net liabilities of £22.24 million, but parent company CBS is still effectively subsidising the company and will “make available such funds as are needed”. We’re hoping that CBS is getting some value out of this relationship.

Over 54% of Last.fm’s revenues in 2009 were from the UK, 33.5% from the US, 9.4% from EU countries, and 2.3% from the rest of the world.

That’s a gain on US users but the question is, is it enough to sustain CBS as a sugar daddy?

Having said that, it pulled away from a gross loss of £3.81 million in 2008 to make a very slim £86,322 profit in 2009. Turnover was up from £4.19 million in 2008, reaching £7.28 million in 2009, while cost of sales was down £0.8m to £7.2 million in 2009. Some £5.37 million of turnover came from ad sales or 73.7%, £1.3 million was from subscriptions (17.9%) and £0.6 million was from affiliate sales (8.4%).

Last.fm was founded in 2002 but only really got going with the addition of Audioscrobbler in 2003. So that’s about 7 years to get to £7m in revenues, people.

Admin expenses were just under £3 million for 2009, but that’s from £13.35 million in 2008. Headcount fell from an average of 79 in 2008 to 55 in 2009, according to the report.

As music blog Musically points out, that would reflect Last.fm’s shift away from on-demand streaming music, which incurred high costs, and is really now being done by a number of providers now like MOG, Rdio and Spotify in Europe.

Musically has also unturfed the fact that the Company granted share warrants to third party labels in exchange for their licensing services. These were exercises at a price of £73.26 per share and vested on 30 May 2007. So it looks like rightsholders did not in fact entirely miss out on the proceeds from its acquisition, as some have suggested.

Meanwhile Last.Fm was the centre of a small spate of controversy recently when it turned off a few subscriber stations that, the company said, weren’t strictly DMCA compliant.

  • Andrew Brackin

    Most Last.fm users just let it suck up their music library and what they listen to. For me it looks like I use it every day but really i’ve just got the app running in the background and forget about it.

    It’s a cool website but they either need to try and get some of myspace’s music users or try another plan.

  • Vrusabh

    Last.fm does not have a social layer..i.e u cannot connect with ur facebook, twitter or any networks friends. They used to have facebook connect back in 2007 but was later diasabled….It is like no development is done after CBS acquired it…

    • http://mdm-adph.blogspot.com mdmadph

      “It is like no development is done after CBS acquired it…”

      Sounds like the norm.

    • illz

      They even took out their premium plan, so you can’t listen to your favorites anymore.

    • http://www.soundtrckr.com Daniele Calabrese

      Did you check out Soundtrckr? it is last.fm with even music with the social and local layers. enjoy it on the web at http://www.soundtrvckr.com and on the iPhone http://bit.ly/nearbyradion

    • Ali B

      I moved over to like.fm from last.fm recently, and they are adding new features almost everyday with a pretty cool social layer that fits into facebook easily. Its like the new last.fm

  • Henry

    It’s a shame, really. My favourite music site by far.

  • Dave

    what last.fm does best is charting what you listen to, letting you discuss songs and albums and artists with other people, and recommending new stuff. I use it all the time, it deserves to be much much bigger.

  • James K

    I always thought that last.fm would have been much better with Apple/iTunes than with CBS. It would have been an early Ping and today it could completely compliment that compliment service.

    • Ali B

      I’ve been using LIKE.fm (as oppose to LAST.fm) since before ping, and they seem to get it. a lot of my friends from last.fm are moving over aswell.

  • http://www.grubhub.com Casey Winters

    They recently cut personalized tag and loved track radio due to the high streaming costs, which were the main reasons I paid for an account.

    The CBS acquisition has really stalled their development. They were so innovative before the sale.

    • dude

      Mo’ money, mo’ problems.

  • http://www.muzicforums.com/music-news-reviews/39330-last-fm-reveals-4-45m-loss-bulk-users-still-uk-despite-cbs-ownership.html#post261410 Anonymous

    […] […]

  • http://www.edocr.com Manoj Ranaweera

    It seems that companies do have a big problem in extracting value from web assets they purchased.

    Let’s hope Last.fm does not end up with the same predicament as Bebo

  • http://jguffey.com Josh Guffey

    You hope CBS is getting value?
    Are you kidding me?

    CBS is probably willing to fork over a couple mil for the type of music consumption data they get from Last.FM. I wonder how much they used to pay surveyors back in the days before the Internet.

  • http://zachcole.com/ Zach Cole

    This is too bad. I’m a diehard Last.fm fan, and I place it far above Pandora and MySpace. I hope it lives on. If I ever lose my Last.fm library, I will lose my mind. And to the people saying you cannot connect with Facebook or Twitter – there are added Facebook and Twitter button on all artist, album, and song pages. :)

  • http://like.fm Chris

    I’m the founder of Like.fm. It’s a more social Last.fm experience. It integrates with Facebook (beyond just like buttons) and twitter so you can find and share music with existing friends.

    Also it integrates with Last.fm, so you can keep scrobbling everything tracked by Like.fm.

    I’m always looking for feedback and new feature requests are integrated quickly.

  • tom

    If last.fm had been bought and integrated into spotify, I think it would be enough to push spotify over the edge into a huge success. last.fm is the only social music service that has got it right (no Ping, i dont want to follow lady gaga’s press officer, i want to see what music my in-touch friend is listening to now and whats the best track of an artist ive not heard before)

  • smartone

    the problem with LastFm is their UI is horrid.. a complete confusing mess

    and yet their music metadata has high search results on google (I always find their pages when looking for band tour info)

  • http://tattletech.net/blog/?p=2563 Tattletech » Blog Archive » Things we learned this week ending December 3

    […] there this week — snow storms, more WikiLeaks stuff, Last.fm with a loss of 2.8m GBP  (see TechCrunch article), and the fact that UGGS can finally be worn (not by me of course) for their true purpose […]

  • david

    54% of their revenue does not mean 54% of LastFM’s users are in the UK as you suggest. If that was the case they’d have over 21 million UK users. I believe the US is much bigger for them.

  • http://soobrosa.soup.io/ soobrosa

    Mike, how does this add up? “made a loss for 2009 of just under £2.84 million” vs “make a very slim £86,322 profit in 2009”.

  • http://www.deutsche-startups.de/2010/12/06/lesenswert-groupon-google-zalando-locondo-pressking-last-fm/ Lesenswert: Groupon, Google, Zalando, Locondo, PressKing, Last.fm :: deutsche-startups.de

    […] Last.fm Last.fm reveals £2.84m loss – bulk of users still in UK, despite CBS ownership Last.fm, the UK-based music startup acquired by media giant CBS in 2007 for $280m (£140m), made a loss for 2009 of just under £2.84 million ($4.45 million), reveal new accounts for the company. The loss posted in 2008 was £17.11 million, reflecting the high costs of streaming music, which the company has now cut. It just goes to show how expensive streaming can be… TechCrunch Europe […]

  • http://margowege.wordpress.com/2010/12/08/last-fm-reveals-2-84m-loss-bulk-of-users-still-in-uk-despite-cbs-ownership/ Last.fm reveals £2.84m loss ? bulk of users still in UK, despite CBS ownership « Margowege's Tech & Gadget Blog
  • http://www.matuk.com/2010/12/08/last-fm-aun-con-perdidas/ Matuk.com » Last.fm aun con perdidas

    […] Musically vía Techcrunch AKPC_IDS += "21216,"; Otras entradas de interésMúsica infinita…La mejor app para […]

  • http://james.cridland.net James Cridland

    £2.8 million is a TINY cost for the type of music research that last.fm offers the CBS Radio business.

    That business, incidentally, increased ad revenue 9% in the last quarter, and brings in over $1bn.

  • http://solucionesconinternet.com/2010/12/08/last-fm-aun-con-perdidas/ Last.fm aun con pérdidas

    […] Fuente: Musically vía Techcrunch […]

  • http://estherballesterblog.wordpress.com/2010/12/13/spotify-o-como-tener-exito-y-perder-1-millon-por-semana/ Spotify o cómo tener éxito y perder $1 millón por semana « DIARIO DE UNA EJECUTIVA

    […] a una reducción por parte de Last.fm de sus servicios y por tanto costes de streaming. Claro quesegún los números oficiales del cierre del 2009, Last.fm tiene unos pagos pendientes de £22.24 mill., aunque la matriz CBS ya ha declarado que le […]

  • http://www.collegesocialnetwork.net/ Laura Lovely

    terrible news

  • http://eu.techcrunch.com/2011/04/14/spotify-the-american-dream-and-why-freemium-is-a-broken-record/ Spotify, the American Dream, and why freemium is a broken record

    […] are the only music streaming service in town. Well, in the UK at least, Last.fm, have pretty much stopped offering free music after huge losses, while Pandora pulled out a long time ago. Also notice earlier that I used the […]

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