From the Wall Street Journal: "CBS Corp. acquired social-networking Web site Last.fm Ltd. for $280 million, delving further into the music business where it was once one of the major players.

"Last.fm, founded in 2002, claims it has more than 15 million active users in more than 200 countries...

"'Last.fm is one of the most well-established, fastest-growing online community networks out there,' said CBS President and Chief Executive Leslie Moonves in a statement. He added the site's 'demographics also play perfectly to CBS's goal to attract younger viewers and listeners across our businesses.'

"Last.fm's team — including founders Felix Miller, Martin Stiksel and Richard Jones — will continue to independently run the site.

"Part of our interactive strategy has been to build communities around all of our properties,' said Mr. Moonves. 'CBS Radio has given us a powerful way to create such communities for decades, and it continues to do so. With Last.fm we're adding a next-generation platform to allow audiences to communicate with us and each other as never before.'

"CBS is moving to remake itself into a content distributor across virtually every medium as media usage becomes increasingly fragmented."

Subscribers can read the entire article at the Wall Street Journal online.

Below are two charts comparing the user statistics of Pandora and Last.fm. The top chart compares the page rank of both sites over the last three years, while the bottom chart measures monthly U.S. visitors over the last year. Read previous RAIN coverage of Last.fm here and here.

Alexa page rank (global)



Compete.com monthly visitors (U.S.)

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x London-based Last.fm is one of the two best-known "music discovery/social networking" radio websites (the other being Oakland-based Pandora). Whereas Pandora operates by creating playlists based on songs' musical characteristics (tone, tempo, instrumentation, etc.), Last.fm creates playlists based on matching up the musical tastes of similar users. According to the press release, CBS's acquisition is apparently not for its "CBS Radio" division, headed by Dan Mason, but rather for its "CBS Interactive" division, headed by Quincy Smith. How Last.fm works Users install a plug-in on their PC called "Audioscrobbler" that allows Last.fm to build a detailed profile of each user's musical taste by recording details of all the songs the user listens to, either on the streamed radio stations or on the user's own computer or iPod. Last.fm is then able to recommend and play artists similar to the user's favorites by looking at other users with similar tastes. There is a detailed explanation of the Last.fm approach to its product at http://en.wikipedia.org/wiki/Last.fm. There were rumors floating around the industry earlier this spring that Viacom — not CBS — was preparing a $450 million bid for the property, but we could never find substantiation of those rumors. BBC News's coverage of the acquisition — which it calls "the largest-ever UK Web 2.0 acquisition" — is here. (By the way, the BBC story says that Google paid $165 billion for YouTube last year; the correct figure is $1.65 billion. Journalists tend to be bad at math.) -- KH x

From Inside Music Media: "SoundExchange is feeling Internet radio's pain. How miraculous. Goes to show you what a little pressure from your elected officials can do.

"So this is what's called a good faith offer to take the heat off — excuse me — resolve the unfair treatment of Internet streamers as it relates to music royalties.

"Pardon my cynicism here, but just as a new generation adopts the Internet and mobile devices as the new delivery systems for entertainment, information and social networking, traditional media hunkers down and tries to make up for their lack of vision — all this on the backs of Internet broadcasters.

"Until Internet broadcasters marshaled their efforts to lobby Congress (with some encouraging success). Until the CRB realized it went too far in raising rates that could put small and large streamers out of business before they can grow their business. Until the NAB said, 'hey wait a minute, we could be next'...

"[I]n the future, music will find its audience on the Internet, on mobile devices, and through social networks — the same conduits the present copyright laws would inhibit. No wonder the NAB is siding with Internet radio. They're next.

"David Oxenford, representing the interests of the small Internet broadcasters, was diplomatic in saying that SoundExchange's idea is a first step. I say, a cowardly step.

"If SoundExchange and the CRB evil doers can manage to get Internet radio operators to take the temporary compromise they will buy time. Worse yet it will leave the Internet streaming business... in an unstable position for the period of the proposed concession... And, perhaps set a standard for terrestrial broadcasters at the same time.

"The music business through SoundExchange is acting in a cowardly way turning their backs on the real issues.

"And, should Internet streamers eventually settle for a compromise that does not resolve the issue for the long term then they too would be cowards.

"Let's hope this doesn't happen because try as we may, radio and Internet radio must not be impeded from its mission — saving the music industry from itself."

Read the entire article at Inside Music Media.

From an Ecast press release: "Ecast, the largest broadband touchscreen media network in the United States, has appointed Joe Kennedy, chief executive officer of Pandora, to serve on its board of directors...

"Previously, Mr. Kennedy served as president and chief operating officer of E-LOAN. From 1995 to 1999, he served as vice president of sales, service and marketing for Saturn Corporation...

"Mr. Kennedy holds an MBA from Harvard Business School and a bachelor's
degree in electrical engineering and computer science from Princeton University."

Read the entire press release online here.