And so finally, after much anticipation, or dread, depending which side of the fence you fall on, last.fm’s radio subscription came into force today for the “rest” of the world. I have watched, with intrigue, from the sidelines, as the affair has played out on the Last.fm blog and elsewhere, not least because the initial response was so negative – some 10% of the 1500 or so comments on the Last.fm blog included the word F#$%.

Initially I was shocked and dismayed, as many of my non UK-based friends were, that after so many years of free service, Last.fm was finally going to enforce a charge model for non UK, US and DE site users. Of course, having been on the other side of the fence, being a former employee of Last.fm, I understood the straight-jacket of rights management, royalties hell and other legal f$%kery they were being forced into. What didn’t make sense to me though, was that in light of the launch of services like Spotify, and with their existing apparatus in place, why didn’t they simply launch a decent subscription model across all countries? One with enhanced features that even UK, US and DE users could by into so that no one felt like they were being left behind.

I suppose the reality is that the world of music is one that is defined by legally imposed and business-orientated boundaries, where rights and responsibilities are sliced up on a territorial basis, and that despite the internet being a medium that does not respect boundaries and borders, the music industry will continue to operate in this archaic manner as it suits them and garners better revenue generating opportunities. Into this mix is the very real problem for Last.fm and other companies, that unlike massive companies like Google, logistically it can only operate in few territories, and that the offices they maintain in the US, UK and DE reflect their best revenue generating markets. Beyond this, their ability to generate revenues in single language, relatively small, but high-cost, markets is tough, and now that they have ditched their foreign language teams – as of December ’08 – despite the cost saving, they are in even less of a position to create such revenue streams and so help make ad-supported service feasible.

But this brings us to a whole other question. Are ad-supported streams really a viable proposition in the long term? Who will eventually win the royalty rates war? And will the majors really be happy in the end just collecting their dues from a rev-share deal? In all these cases I think the majors will likely win out. The tide of the law is finally turning, and it looks like overall, law-makers, people and business will come to a logical and reasonable position. In addition, labels are already leveraging their position on content with Google and Vevo and I am sure more deals to this end are likely to come out of the woodwork.

Overall, I think there are better ways that Last.fm could have positioned themselves in this matter, but then again I don’t know the exact discussions that were to be had around the decision making table, other than making the basic assumption that CBSi was, is, and will continue to be, unlikely to dig deep into its pockets. Come what may, fewer users or not, Last.fm should probably just focus on what they do best, which is scrobbling, and leave the game of playing with labels to the other sites, each of which will be swatted off in turn by the ensuing cat fight, leaving the major label player as the remaining incumbent. Then, and only then, will the majors probably rest easily in their beds at night.