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.