On Last.fm and royalty payments

Clear Channel didn’t get away with it, and now Last.fm is taking heat for not paying out royalties to independent artists. Last.fm, recently purchased by CBS, is now heating up indie music business blogs with this policy, even though it’s been in place since the company started.

Why so, asks the intrepid indie music biz blogger/Last.fm enthusiast and indie label/band person? Well, it seems there’s some misunderstanding of how royalty collection works. Last.fm is in fact playing by the rules, paying royalties to collection societies when tracks are streamed.

The big difference between Last.fm and conventional radio (and indie labels and bands should take note) is that with Last.fm, playlist/track streaming statistics are not hidden from public view, and do not rely on the inaccurate and gameable conventional sampling methods used by groups such as BMI, ASCAP or SOCAN in tracking radio airplay. And it’s not a closed pay-per-stat-view shop like Big Champagne is. As if that weren’t enough, the problem of payola is curbed via the voluntary ‘pull’ nature of “airplay” on Last.fm. The critiques of radio cannot be transplanted to a service such as Last.fm so swiftly. It is simply a different animal.

And anyway – wasn’t the hulaballo about Clear Channel over the issue of payola in the first place? Lest we forget, “Clear Channel had responded to allegations of payola with a pay-for-play scheme“.

This is not to say that there’s nothing about which we can be critical with this Last.fm thing. I’ve blogged this previously, but I’ll say it again: it matters who owns what in Internet 2.0. And even though it feels like listeners are running the show on Last.fm, they might not be, and probably aren’t. Every boss must manage, and every company must profit, or die. It seems that the most important question is still – to invoke the terminology of radio, new and old – are we really “streaming” or are we being “programmed”?

2 thoughts on “On Last.fm and royalty payments”

  1. My beef is that Last.fm just made a deal with SONY to stream content. I’ll bet that includes more than just their previous token payments to Sound Exchange.

    My secondary problem is that now Last.fm is part of a huge media empire, received 280 million, and got there on our content. We put them on the map.

  2. Thanks, Bill. This is indeed more reason to cast doubt on the future of Last.fm, and whether it will ever be a truly trustworthy recommendation engine/music sharing/distribution site. But as an indie artist with less than 300 listeners I wouldn’t take credit for putting LFM on the map (even the whole 28% of the market represented by A2IM couldn’t take that credit collectively). Remember that a lot of Big 4 music drives use of the site, too. Just look at the charts.

    Unless of course by “our content” you mean “our playlist information”. In that case, yeah, I agree, but as a listener I feel I’m getting more out than I put in. Well, sometimes I feel that way.

    At any rate, we should always be using/trumpeting these services with a grain of salt, and perhaps also with a tongue firmly in cheek.;)

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