Although I hate to jump on the whole “Day The Music Died” thing — which I think is a little over the top — I find it interesting that while a whole bunch of Web radio companies, including Yahoo Music and Pandora, are turning off their streams in order to protest the increase in licensing fees for Web broadcasting, Last.fm has decided not to, which has caused some consternation in the blogosphere, including this post at TechCrunch by Duncan Riley.
Riley says that the Last.fm decision could risk a backlash from users, and in a follow-up post at TechCrunch, Mike Arrington raises the issue of whether the company’s decision has something to do with it having become part of CBS, the media conglomerate that bought it for $280-million not too long ago. Last.fm, in a blog post in its defence, says: “We do not want to punish our listeners for our problems, period.” The company argues that royalty rates are a fact of life, and that because it is based in the UK it has had to deal with them for a long time, etc. It says the industry should fight for fairness, but that turning off Internet radio even for a day “is just plain wrong.”
While the idea that users should come first is an appealing one — and companies like craigslist.org have certainly prospered by making it a mantra — Last.fm’s argument seems a little disingenuous. If the doubling of radio royalty rates takes effect (Stan Schroeder at Frantic Industries has a nice overview of the issues, as does the SaveNetRadio site), small streaming companies could go under. That would obviously leave Last.fm in a pretty sweet position.
I’m not saying that’s why Last.fm made the decision it did. I don’t know the company or the founders, so I can’t judge. I’m just saying it looks kind of fishy — especially when Yahoo and RealNetworks and others have joined the protest. Turning off the stream for a single day doesn’t seem like a huge issue to make a point, and I would bet that Last.fm’s users would probably support the move.
(Incidentally, Pandora has been inaccessible to Canadians for more than a month, after the company turned off access to Canadian IP addresses because it couldn’t afford to reach licensing deals with all the record labels for Canada as well as the U.S.)