ONE 1 • Saving the Last Dance: Last FM and the End of the Music Industry

ANDREW B. SMITH tunes in, turns on and drops a bombshell.

{xtypo_quote}Will the UK’s spell the end of music radio as we know it? Some commentators think so, but the record industry aren’t happy.{/xtypo_quote}

On 26 June 2007, John Cage’s avant-garde piece 4’33” played on an endless loop as US webcasters collectively decided to put their stations on 24-hour mute for an online radio “Day of Silence”.

It certainly seemed an irrational act for operations whose livelihoods depend on supplying music to an audience of millions. However, in reality, it was a desperate last-ditch attempt to derail plans to dramatically hike performance royalty rates for US internet radio stations—in some cases by up to 1200%—leaving traditional big media once more in complete control of the airwaves. Closer analysis reveals this as simply the latest skirmish in an ongoing battle for control of the production, distribution and consumption of music that has been fought since the very beginnings of the record industry.

Ironically, it is a UK-based outfit that may open a new front in this long war, one that has made a very deliberate point of showing no solidarity with its US webcasting counterparts., a self-styled social music platform, is the poster child of the UK’s Web 2.0 movement. Founded in 2002, its success rests upon an ingenious piece of software developed by then 19-year-old computer science student Richard Jones at the University of Southampton for monitoring what you’re listening to and making recommendations about new music. Journalist Ben Hammersley at The Guardian wrote a piece on the nascent system in March 2003, catching the attention of Martin Stiksel and Felix Miller, who’d been working on a number of internet radio projects previously.

After a visit to Jones’ digs in Southampton, Stiksel and Miller persuaded him to move to their London flat, where he lived in a tent on the roof while they all worked on developing the product. The rest of the story has been well documented elsewhere: rapidly building a user base of over 15 million people worldwide, the final payoff came when US broadcasting giant CBS snapped up for $280 million (£142 million) in May 2007.

{xtypo_quote} has made music nerd-dom fashionable and turned Hornby’s previously guilty pleasures into a worldwide phenomenon.{/xtypo_quote}


The media coverage of’s rapid rise has largely focussed on the amount of money made by the company’s young founders. Aside from predictable cries of “Sell-out!” from certain quarters, it’s worth examining more closely exactly what has actually harnessed: namely, the technological means of tapping into deep-seated aspects of music listening and discovery, and a long-held public fascination with music charts and sharing music.

The lineage of the current crop of net music discovery sites such as Pandora—and in particular—can be traced back to 1952 when the first British singles chart was published by the New Musical Express. Initially, seen as little more than a gimmick—a tool in the circulation war against NME’s much older, and more popular, rival Melody Maker—it fascinated the listening public. The chart was the creation of the paper’s advertising manager, Percy Dickins, who apparently compiled it by telephoning around 20 major record stores and aggregating their sales reports. is the ultimate extension of these crude measures of popular taste—a music buff’s wet dream. Charts are automatically compiled on your own music listening activity as well every other member.

And yet, for all the promise of breaking new frontiers of music listening, users remain a conservative bunch. For the week of 15 July 2007, The Beatles topped’s user charts with 57,831 people listening to 608,925 Fab Four tracks. The Red Hot Chilli Peppers, Radiohead, Linkin Park and Muse occupied the rest of the top five—and there is little movement in these places from week to week.

If music tastes aren’t being radicalized at a general level, there is no denying that offers the potential for genuine musical discovery on a previously unprecedented scale. The key to this is the user dashboard—a single web page that provides a bewildering away of statistics and information on the music that your friends listen to or recommend. Without realizing it, author Nick Hornby may have provided the blueprint for a user profile page in his novel High Fidelity.

The book offered a credible insight into the mind of the modern music enthusiast through the main character of Rob Fleming, a 35-year-old pop addict and owner of a failing record shop. He asked: “Is it possible to share your life with someone whose record collection is incompatible with your own? Can people have terrible taste and still be worth knowing? Will I ever be able to stop thinking about life in terms of the All Time Top Five bands, books, films, songs?” (The answers from a typical listener to these questions would be yes, yes and no.)

A later Hornby book, 31 Songs, also taps into the mindset. From Teenage Fanclub’s “Your Love Is the Place That I Come From” to Patti Smith’s “Pissing in a River”, Hornby discusses, among other things, guitar solos, singers whose teeth whistle and the sort of music you hear in high-street shops. has thus made music nerd-dom fashionable and turned Hornby’s previously guilty pleasures into a worldwide phenomenon.

Having said this, it’s important not to forget that sharing music has always been an aspect of the music consumption experience. In the past, teenagers would either gather around a Dansette to play singles and albums that they had bought individually—providing access to a broader set of music than any one person could afford—or, for a price, access specific songs on a jukebox. The good news for the record companies in these times was that they had an iron grip on what you could listen to and where you could do it.

The emergence of the cassette tape in the 1960s took music sharing to another level—and also saw the music industry’s first attempts to criminalize the practice of music exchange. Most inner record sleeves of the 1970s carried the dreaded skull and crossbones of the “Home Taping Is Killing Music” campaign.

The furtive taping and sharing of tapes can, therefore, be seen as the spiritual forefather of’s personalized radio. Unlike previous generations, users can share their music listening activity with every other user—all 15 million of them. It is possible to compare your own musical compatibility with these users, and so discover new music based on your own tastes; you can, of course, also choose to listen to people who don’t share your taste—if you want to find something completely new. And you’re not restricted to record-company-sanctioned material. What has gone largely unnoticed is that also offers a MySpace-style facility for unsigned bands to upload their own music to make it available to listeners. In this way, both record-company-produced and unreleased material can coexist in a truly universal jukebox.

But in spite of the promise this holds, the music industry still seems unable to shake off its fear of such an environment—no doubt fuelled by the early years of internet growth that saw the emergence of file sharing as its first major threat. Sites such as Napster allowed listeners to share music with fellow users all over the world—not just those in their immediate vicinity with a record player or cassette recorder.

The original Napster may have bitten the dust, but the Recording Industry Association of America (RIAA) continues the fight to shut down similar file-sharing sites and criminalize those who use them. It was against this backdrop that emerged into the world.
In the context of the current battle with US webcasters over performance royalties, being based in the UK has thus forced to take account of a far greater number of hurdles than their US counterparts.

“Many people believe that they own the music when they buy a CD or purchase a download track. They don’t, of course—they’ve paid for a licence to access the music, in the same way as they do when they buy a software licence or, indeed, a book.”

As’s Felix Miller explained on the company blog prior to the US “Day of Silence”: “If a commercial challenge comes up, we have to deal with it. And we’ve had our fair share of challenges. Since started we’ve engaged in negotiations with the music industry, leading to our recently reaching an agreement with several major record labels for the use of music on our service. As a legal and responsible provider of music, we’re continuing discussions with record labels and music publishers. At the same time, we’re negotiating with royalty collection societies to make sure we can get rates that make sense to us. We think that turning off the radio is just plain wrong. This has been a no-brainer from day one for us: the users rule, and we serve them. If only one person wants to listen tomorrow, we should serve them.”
Almost unnoticed, has quietly pursued a policy of attempting to work with the current music industry giants. Irrespective of how the net radio performance royalties debate is settled, under CBS offers some glimpses of the future of music production, distribution and consumption; for example, the old issues of copyright, ownership and access to music remain. Many people believe that they own the music when they buy a CD or purchase a download track. They don’t, of course—they’ve paid for a licence to access the music, in the same way as they do when they buy a software licence or, indeed, a book. The traditional record business has struggled to come to terms with web radio in this environment. Some commentators believe that the record companies see web radio as responsible for a decline in CD sales—hence the current attempts at raising performance royalties.

“Stream-ripping”, the practice of recording web radio streams, is thus now seen as the digital equivalent of recording music on cassette tapes for sharing in the 1970s—and the latest target for the music industry.

Some sources say that Digital Rights Management (DRM) is the only plausible tool at the disposal of webcasters to accomplish SoundExchange’s—the RIAA-backed royalty collection agency—goal of working to stop music stream-ripping.

However, the industry’s attempts at imposing DRM don’t exactly set a great precedent—witness Sony’s attempt to protect CDs with a DRM technology that would have made a virus writer proud.

Bigger questions remain: how are artists to be properly rewarded and encouraged to create in a world where people believe “free” is the default position? Then again, if something like becomes a universal repository for music, perhaps it may use some of its cash to support the promulgation of new music, given that the means of production—recording technology—is universally and cheaply available. But are we simply in danger of swapping an oligarchy for a monopoly?

This point is even more pertinent as technology develops. As Wi-Fi access becomes ubiquitous, and possibly free, the introduction of portable Wi-Fi-enabled music players and hi-fi equipment is inevitable. Apple’s new iPhone is a prime example—and Logitech’s Squeezebox already provides the ability to play internet radio via a home hi-fi. This opens up the possibility that none of us will ever have to buy any music ever again—because all music will be accessible anywhere, anytime. How are we to pay artists in this environment as well as encourage continued artistic output?

In short, the raising of fees for internet radio stations is a very blatant attempt by traditional big media to retain their old-style control of music production and access. The public backlash in the US is already huge—apparently second only to the Iraq war in terms of complaints to local senators.

But is the answer? Nagging concerns remain about CBS’s long-term intentions. All the right noises are being made about allowing the site to develop without interference, but there’s no escaping the fact that CBS is a publicly quoted company that ultimately exists to generate profits for shareholders. Whether this can be squared with’s aims of allowing listeners genuine control over what they listen to—and where—is another matter.

John Cage’s 4’33” may have to wait a while before it becomes a worldwide best-seller. Even though becoming “the last radio station you will ever need” is clearly not a foregone conclusion, it holds a tantalizing key to the way in which music will be produced, accessed and consumed from now on.

Principal at London-based Object Marketing, one of the UK’s leading IT public relations consultancies, Andrew B. Smith has over 20 years of experience in journalism and PR. His interests include the writings of George Orwell, as well as music, film and books.