rumtide tomorrow night!

Warner has lost its senses in Last.fm Split

Taken from post by Paul Glazowski June 7, 2008 found here:

Last.FM marked a company milestone many months ago when it signed a number of music industry giants to its multi-million-strong audio track list. The now CBS-owned service counted Warner Music Group as one of the first participants. No more. This week, Warner retracted its catalogue, as was reported first by Peter Kafka of Silicon Alley Insider. The reason? Greenbacks Biography-of-the-Dollar-Review Mar-08 . Not enough of ‘em coming through, apparently.

As Saul Hansell of The New York Times explains it, Warner saw that its contract with Last.FM had come upon its final hours, and because CBS wasn’t willing to offer up the bucks Warner was requesting to allow the online streaming service to continue serving its songs - on-demand or otherwise - goodbyes were given.

Executives “briefed on the negotiations” claim that Warner wasn’t happy that Last.FM hadn’t yet enacted a planned fee-based subscription service, which the music giant had hoped to see, but I imagine that had little to do with its departure. Paid subscription music services on the Web have not shown strong growth in the past, and there’s little reason to expect Last.FM to put on a significantly better performance in that department. Instead, I presume the probable cause rests exclusively in the ad-suppported per-track playback fee, which Hansell describes as one purported soft spot responsible for discontinued relations. Warner claims to have found that services like Imeem and MySpace Music “offer richer deals.”

As with the largest service-provider-versus-song-provider battle in the purchase-to-own digital download arena (as many now know, the majority of record companies have maintained restrictions on several million songs within the increasingly fast-selling iTunes itunes-overtakes-wal-mart-in-music-sales Apr-4-2008 Store from being sold as high(er)-quality, DRM-free selections), this exit by Warner from Last.FM serves the former no benefit.

I’ve said repeatedly that the music industry giants are really in no position to act overzealously when it comes to dealing with Web services. If Warner cannot get Last.FM to present a larger bounty per track playback, or even a broader ad-revenue sharing deal of some sort, it is likely because Last.FM cannot effectively muster such an increase. And for Warner to remove its catalogue is to potentially inhibit growth for Last.FM, which means it will logically take a longer span of time for Last.FM to build its usage figures (sans Warner in its repertoire) enough to warrant the desired increase in “royalty” fees.

Yes, CBS still maintains working relations with EMI, Sony, and Universal, which is certainly helpful to Last.FM. Those deals stave of a collapse of the service, which would undoubtedly come as a very inconvenient shock to many a music fan. But there is no trifecta in the music business Job-of-the-Week-Music-Supervisor . The only ideal is the four-play. (Unless further consolidation in the industry is realized.) And it is in the RIAA’s best interest to work collective, comprehensive deals wherever popular services may be found, because they then encourage growth of memberships for those respective services, and subsequently expand their own revenue streams, which have shrunk considerably in the past few years.

There’s really only one conclusion to make of this week’s news. A bad move by Warner brought bad news for Last.FM. There’s no winner to come of this severance. The still-rocky musical food chain could use all the mutual support it can get. That means all RIAA members need to lower their fences many more notches and start getting a good bit more liberal with how they distribute content.

Memo to Warner: Remove the blinds, guys. The strongarm approach won’t help your cause. Last.FM is no frenemy. Don’t keep it at arm’s length. Get close, and stay close.