Update: CBS Purchases Last.fm
In a bid to enter the world of social networking, CBS announced today that it paid $280 million for the social network music service Last.fm.
In recent articles Scrobble Anyone? and Online Radio: Pandora’s Box? we addressed the emergence and appeal of socially networked music sites like Pandora and Last.fm—as well as some concerns.
The Baggage
One primary concern, the ongoing copyright issues leveled at online radio sites by the Recording Industry Association of America (RIAA). In fact, Pandora prominently displays a message on their site that begins, “Don’t let the RIAA kill Pandora and Internet radio. Ask Your Senators…”
Of course RIAA-perpetuated legal concerns didn’t deter CBS from entering the Internet Radio market space. Perhaps CBS is counting on their own considerable clout and media presence—as well as that of a few big friends—to see them through that aspect of the business plan. From MediaPost:
CBS’s acquisition comes at a time of increased activity surrounding digital music. Consider, Amazon recently said it was going to start selling music downloads, while Apple today began offering tracks from EMI without digital rights management restrictions. Additionally, late last year Pandora agreed to power MSN’s online radio service.
The Drama
Online radio sites like Last.fm, Pandora, BlogMusik and RadioBlogClub function as natural gateways for online music merchants. With EMI, MSN, Apple, CBS and Amazon posturing for a piece of the download music market—and the RIAA looking on as arbiter—this should prove interesting.
The Goods
With CBS at the helm, Last.fm will likely begin to move from lead generator to direct sales. CBS itself may benefit from a whole new market to offer its advertisers—a nice hedge against television advertising revenue. And brand marketers should benefit from CBS offering an online alternative to the traditional CBS offline advertising fare. All in all not bad—potentially.
Image source: the.woelfchen
