turns on ad-supported free music model, a teaser towards subscriptions

TechCrunch US has got the story on LastFM’s news business model (it appears to have been released on a US media schedule). The gist is that the CBS-owned service will now allow you to stream the full track of any song up to three times for free, in addition to the famed music-discovery service which streams related songs you might like in a random order. After the three plays a popup asks you to pay a subscription to get unlimited playback, presumably using an IP address and cookies to identify users who are not logged in. But the key point is this: go to the site, type in the artist and press play. It looks like Pandora is in trouble then, not least because you can’t officially access it from Europe. has signed deals with all four major record labels and 150,000 independents to stream their tracks in the US, UK, and Germany, with other countries coming soon. Artists and music labels will get ongoing royalties (details not released) based on how many times each song is listened to. So this is a pay-for-performance model, closer the ‘pay for live’ model (as in, go see a show in real life and pay for it) which is the only real way music is thriving right now. Un-signed artists can even upload their music and join the site. The site is also rumoured to be looking at the same model for video.

As TechCrunch’s Erick Schonfeld says:

Music needs to be sampled before most people want to buy it. The current Web industry norm of the 30-second clip just won’t cut it anymore. Perhaps will help to set a new precedent here with limited full-track streams. It might be difficult for iTunes or Amazon to abandon the 30-second preview, however, because neither one has an ongoing revenue stream from advertising or subscriptions with which to pay an ongoing royalty. At least, not yet.