Popular CBS owned online music service Last.fm has announced that it will cease providing free access to users outside of the United States, the United Kingdom and Germany. Instead, users outside these countries will have to pay €3.00 (US$4.05) per month to have access to music on the site, as we reported earlier.
Last.fm did not specify the reason behind the decision, and instead rattled on about what a wonderful job they do. Speculation (and reason) suggests that the decision may be related to royalty payments and/ or the need to increase revenue at a time that the online advertising market is being hit hard by the great recession.
The fail in the decision is demand: why would users pay Last.fm to listen to music when they can obtain it online via a variety of other sites, both legal and illegal, for free. Add to this that Last.fm doesn’t have access to Warner Bros music, so even if you did pay, you don’t get access to 15% of the market and some of the biggest names in music (a full list here.) Alternatives services like Grooveshark will be rubbing their hands with glee.