Another business plan bites the dust. The fundamental problem is that Big Content is organized to distribute their wares through an expensive and outdated manufacturing process (like carving it into vinyl discs or stamping it onto dead trees) and then shipping it.
It takes a lot of money to build and perpetuate a manufacturing and distribution system like that (even the auto industry is having problems with it).
By contrast, artists can now produce a superior quality product in their bedroom, promote it and distribute it for free. Customers aren’t stupid. They’re asking where that cash that used to pay for the distribution system is going. Certainly not into the pockets of the artist.
The problem for Big Content is finding a way to justify continuing to take a sizable fraction of the artist’s ( or journalist’s) income.
Last.fm came close to being a unique and promising answer. Last.fm would promote music to wider markets by allowing users to play it for free, on demand, a limited number of times around the globe. In return, listeners used a social component to build artist reputation and contributed a noteworthy music database.
In addition, the site was ad supported, you could pay a nominal fee to remove the limit on replays (subscription), and link through to pay for music downloads.
Less than a year after unveiling what it called a “free global jukebox”, Last.fm is scrapping free radio listening, except in three key countries: the USA, the UK and Germany. The site, acquired for $280m by media giant CBS almost two years ago, will instead introduce a €3 monthly equivalent fee for music streams. The site cruft, such as recommendations, interviews and social networking, remains free.