Sarah Falzon is a first year JD candidate at Osgoode Hall Law School and currently enrolled in the course Law & Social Change: Law & Music, in Winter 2011. As part of the course requirements, students are asked to write a blog on a topic of their choice.

Last.fm announced that it is ending its free, ad-based service of streaming music to mobile phones through The Official Last.fm Android App.

Last.fm is an online music recommendation service, as well as an internet radio provider that provides free desktop radio streaming and, until February 15, provided free ad-based streaming to mobile devices and Xbox Live. Since February 15, users have been required to pay a $3 monthly subscription fee to access the service. The subscription fee does not allow the opportunity for user choice of music, as compared to other mobile music providers, but provides a service that will be free of advertisements.

According to Last.fm, advertising-based models are not effective when it comes to providing the service to mobile devices. The main reason put forth for the decision to switch to a monthly subscription fee was that generating income through paid advertising was not practical with respect to the phone service. On a desktop, there is opportunity for both audio and visual advertisements to get viewership, while the average person listening to Last.fm on an Android phone with ear buds is unlikely to look at the screen. Mr. Hawn, Last.fm’s VP, Product, explained that they are trying to make rational decisions about their business model while financially supporting the artists who make the music listeners love.

However, it is not completely certain whether this will turn out to be the best decision for all involved. Users seem willing to pay for a mobile music service, but not for the sole benefit of the elimination of advertisements. With the low subscription fee, it seems that the concerns are far from being about cost and actually about the ability for the consumer to have choice of the music itself.

Interestingly, various blogs and comment forums have many users saying that they will switch to different fee-based mobile music-streaming applications. The reasons themselves go to the services offered. With Last.fm, while one can subscribe to radio stations of choice, there is no option available to decide the specific song or artist to listen to. So although other online radio programs also offer a paid subscription service for mobile devices, they provide more choice which seems to generally leave users with the feeling that payment is valid. For example, many users have said they will switch from Last.fm to services like Spotify where they will also be provided with artist- or song-based choices.

The people who used the Last.fm service before the imposed fee were content with the lack of choice of music since the service was free, but in return for paying a subscription fee the consumer is arguing for greater choice in the specific song or artist listened to and not just the elimination of advertisements. While this is sparking consumer debate over the services offered by Last.fm, it is still a positive development with respect to online music services. Consumers are willing to pay to listen to music through a service such as Last.fm even in this age of rampant online piracy.

Posted in Law & Music Course Topic, Music Industry, Technology