Last.fm: Music goes social – Web 2.0 style

Last week I helped to compile the list of up and coming Web 2.0 stars for Dion Hinchcliffe's Web 2.0 Blog. One of the companies highlighted was Last.fm. This week I had an opportunity to talk with Martin Stiksel, one of the founders of this London, UK-based company. I wanted to share some of those insights with you and provide further information about this great service. Last.fm is classed as an online radio station but that does this service a major injustice. It is a 100% community driven radio station. Last.fm is poised to become the next big Web 2.0 success story. All the right ingredients are there. Alexa ranks the service in the top 500 sites on the Internet. Last.fm succeeds because by default, after registering and downloading an application, all a user has to do is play music through their usual media player whether that is iTunes, Winamp or some other player on Windows, Mac OS X or Linux. The Last.fm application “scrobbles” the tracks that you play, uploading the play information - not the tracks themselves - to your account on the service. This data is integrated with that of thousands of other subscribers to create collective recommendations and tailor recommendations specifically for you. Other elements that we have come to expect in the Web 2.0 world are all there: journals, tags and an ability to find friends and neighbors that share similar musical tastes. The whole environment is dangerously addictive. From a business perspective there is a solid business model with multiple revenue sources. Last.fm is self-financed. Revenue comes from three sources:

1. The millions of users using last.fm generate significant advertising revenue from the discretely sited ads on the site.
2. While browsing recommendations it is a simple process to buy an album from Amazon or download a track from tunetribe.com, an mp3 download partner. All sales generate revenue for last.fm. The service is also attractive to independent record labels and artists since it provides a mechanism to target potential record buyers.
3. Most services are free but the subscription option is also in place. For $3.00 per month all ads are eliminated on the site and you are able to create your own radio broadcast that can be streamed to friends. You are also able to stream themed broadcasts from other last.fm subscribers.

What keeps users coming back? The ability to find new music that fits their taste. This is a compelling feature that Apple and Amazon understand. Amazon has made a science of tracking our buying habits and making recommendations. Apple has done the same with their iTunes Music Store. Last.fm takes this further by tracking what we actually listen to and then providing the social dimension to this activity. The more you listen to your own music, or to streams from the service, the more accurate their recommendations become. The contagious, viral nature of the service is reflected in the ongoing growth in traffic to the site. Over the past 12 months usage has grown with frequent surges in traffic. In comparison with pandora.com, a similar online radio service. Tim O’Reilly outlined a series of factors that represent the hallmarks of a Web 2.0 offering:

• Services, not packaged software, with cost-effective scalability
• Control over unique, hard-to-recreate data sources that get richer as more people use them
• Trusting users as co-developers
• Harnessing collective intelligence
• Leveraging the long tail through customer self-service
• Software above the level of a single device
• Lightweight user interfaces, development models, AND business models

Based in London, UK and founded by Felix Miller, Martin Stiksel and Richard Jones, Last.fm scores as a service that can scale. It has found a way to tap in to a rich data source and the poweful network effects in harnessing collective intelligence and aggregating information from millions of users only serves to make their data source richer and more attractive. Users can participate passively, letting the information about the music they play be captured by last.fm, or they can take an active role and join the online community making recommendations to friends on the site, creating journals and music charts. Finally, Last.fm is built on the Audioscrobbler database. A development community exists to support last.fm and plugin protocols are published and web services, based on REST, can be tapped to access information on artists, tracks, tags and other data stored in the database. RSS feeds are available for charts and other information. Sample code is provided to enable subscribers to insert charts and recent play lists on Myspace or in a blog. The only thing that seems to be missing is the ability to easily invite someone to join last.fm. An absolutely essential viral feature. I am told by Martin Stiskel that they have been busy reworking that feature during the recent redesign and are set to re-launch the feature "imminently". Making it an easy one step process to invite a friend to join the service will only serve to accelerate the popularity of this service and let it latch on to the growth curve we have seen with successes like YouTube and MySpace. Last.fm provides the ability to create charts. They have taken that capability and provided the tools for subscribers to add personalized charts to MySpace and other sites. Once again the community driven nature of the service shines through because you can choose a custom chart layout that other subscribers have created. You should see the last three songs I have played listed below: If you enjoy music and haven't taken a look at Last.fm, you are missing out on a great service. For those of us that follow developments in the Web 2.0 community Last.fm is worth studying as a demonstration of a company that boot strapped itself and has grown and evolved through word of mouth recommendation and feedback from a rapidly growing community of fervent users. Last.fm may have millions of users but it creates a comfortable environment where users can connect and contribute through common interests. As a music and movie lover drop me a comment and let me know if there are any other services out there I should know about.