Spotify versus last.fm
If you want music streamed to your computer for free there's already a big choice. As the ailing record industry thrashes around in search of a viable business model for the digital age, all sorts of deals are being done with new online services.
Context & Ripple Effects
Two years after CBS paid $280 million for Last.fm, betting on it as a hedge for its radio business, the free-streaming field has a new challenger. Weeks after TorrentFreak framed Spotify as an alternative to music piracy, the dot.life blog weighs the two head-to-head at a moment when labels are cutting whatever deals they can with new services.
First-order effects
- Listeners choosing between free streaming services now face a real fork: Last.fm's recommendation-driven model versus Spotify's on-demand catalogue, forcing both to compete for the same ad-supported audience.
- Record labels negotiating with these services must decide which access model — scrobbling/discovery or full on-demand playback — gets licensing priority while the industry searches for a workable digital formula.
Second-order effects
- Whichever service proves the better piracy substitute sets the template other entrants must match, pressuring rivals like the later MOG and Rdio generation into similar free tiers.
- If on-demand streaming wins over discovery-first listening, the value of data assets like Last.fm's shifts, complicating acquirers' assumptions about what they bought.
Third-order effects
- The contest foreshadows streaming becoming the industry's dominant distribution channel — with the artist-payment fights and royalty-flow debates that dominated coverage by 2011–2012 already latent in these early licensing deals.
- Ownership of the discovery loop — who recommends the music versus who streams it — emerges as the durable strategic question, determining which platforms capture listener relationships rather than just catalogues.
The trend: This early Spotify-versus-Last.fm comparison is one data point in the shift from ownership and piracy to licensed streaming as the music industry's core business model.