Last.FM marked a company milestone many months ago when it signed a number of music industry giants to its multi-million-strong audio track list. The now CBS-owned service counted Warner Music Group as one of the first participants. No more. This week, Warner retracted its catalogue, as was reported first by Peter Kafka of Silicon Alley Insider. The reason? Greenbacks. Not enough of ‘em coming through, apparently.

As Saul Hansell of The New York Times explains it, Warner saw that its contract with Last.FM had come upon its final hours, and because CBS wasn’t willing to offer up the bucks Warner was requesting to allow the online streaming service to continue serving its songs - on-demand or otherwise - goodbyes were given.

Executives “briefed on the negotiations” claim that Warner wasn’t happy that Last.FM hadn’t yet enacted a planned fee-based subscription service, which the music giant had hoped to see, but I imagine that had little to do with its departure. Paid subscription music services on the Web have not shown strong growth in the past, and there’s little reason to expect Last.FM to put on a significantly better performance in that department. Instead, I presume the probable cause rests exclusively in the ad-suppported per-track playback fee, which Hansell describes as one purported soft spot responsible for discontinued relations. Warner claims to have found that services like Imeem and MySpace Music “offer richer deals.”

As with the largest service-provider-versus-song-provider battle in the purchase-to-own digital download arena (as many now know, the majority of record companies have maintained restrictions on several million songs within the increasingly fast-selling iTunes Store from being sold as high(er)-quality, DRM-free selections), this exit by Warner from Last.FM serves the former no benefit.

I’ve said repeatedly that the music industry giants are really in no position to act overzealously when it comes to dealing with Web services. If Warner cannot get Last.FM to present a larger bounty per track playback, or even a broader ad-revenue sharing deal of some sort, it is likely because Last.FM cannot effectively muster such an increase. And for Warner to remove its catalogue is to potentially inhibit growth for Last.FM, which means it will logically take a longer span of time for Last.FM to build its usage figures (sans Warner in its repertoire) enough to warrant the desired increase in “royalty” fees.

Yes, CBS still maintains working relations with EMI, Sony, and Universal, which is certainly helpful to Last.FM. Those deals stave of a collapse of the service, which would undoubtedly come as a very inconvenient shock to many a music fan. But there is no trifecta in the music business. The only ideal is the four-play. (Unless further consolidation in the industry is realized.) And it is in the RIAA’s best interest to work collective, comprehensive deals wherever popular services may be found, because they then encourage growth of memberships for those respective services, and subsequently expand their own revenue streams, which have shrunk considerably in the past few years.

There’s really only one conclusion to make of this week’s news. A bad move by Warner brought bad news for Last.FM. There’s no winner to come of this severance. The still-rocky musical food chain could use all the mutual support it can get. That means all RIAA members need to lower their fences many more notches and start getting a good bit more liberal with how they distribute content.

Memo to Warner: Remove the blinds, guys. The strongarm approach won’t help your cause. Last.FM is no frenemy. Don’t keep it at arm’s length. Get close, and stay close.

—
Related Articles at Mashable! - The Social Networking Blog:

Last.fm Partners with The Orchard…Mashable Readers Fall Asleep
Last.fm Partners with EMI
WOW: CBS Acquires Last.fm for $280 Million
Last.fm Partners with IODA - Even More Music on Last.fm
Last.fm Partners with Warner
Warner Drops Copyright Infringement Lawsuit Against Imeem
Last.fm Launches Subscriptions - Surviving the Online Radio Fallout

Visit the News Source, Mashable

If you liked this, You might also like:

1. Revision3 Halts Production Of Social Brew
2. Revision3 has been in the news more than usual the past two week, mostly due to its falling victim...
3. Poprl Tracks Clicks to Create Twitter News
4. In the world of Internet social news there are hundreds of sites that attempt to aggregate all of the...
5. T-Mobile Sues Starbucks, Says It Jumped The Gun On Free Wi-Fi
6. Only several days have passed since Starbucks and AT&T officially made available free Wi-Fi to US customers (upon purchase,...
7. Thanks to This Week’s Sponsors
8. Thanks to this week’s advertisers and partners for helping us grow to be the #1 social news blog in...
9. Amazon Is Down. Very Down.
10. When a service as big as Amazon is unavailable, you expect at least a message along the lines of...
11. AOL’s Platform-A Expands to Europe
12. Platform-A has announced its European expansion today, aligning with the AOL advertising operations that are already in existence in...
13. You Can Now Watch YouTube Videos On Sony Bravia TVs
14. …but I’m not sure you want to, given the fact that most YouTube videos are barely watchable even on a...
15. Web App And Widget Engine Zembly Launches
16. Developing Web applications to be used within social networks and numerous other cloud-based structures is becoming more and more...
17. List of Great IT Tools!
18. I found this great collection of tools for a variety of venues like flickr and your blogs. 40+ Tools For...
19. An Alternative to Advertising for Web 2.0
20. Steven Hodson is the cranky old fart as well as respected Web 2.0 and social media pundit behind WinExtra.com....