Last.fm said yesterday that it will charge its non-U.S., UK and German visitors 3 euros (about $4) a month. Today the music discovery service says it’s also cutting off unofficial apps that are using Last.fm API, a move that has made many independent app writers pretty angry. The latter seems like a move to appease the record labels, but taken together, it looks like Last.fm is trying to develop a post-advertising business model.
By killing access to unofficial APIs, the company will also be able to rein in its royalty payments. And it’s been widely documented how tough it is for web services to monetize well with advertising beyond the aforementioned three markets. With parent CBS facing the same dire straits as most media companies, Last.fm needs to develop new revenue sources — fast. I admire the Last.fm team for trying out these new monetization models. Many other social networking sites would be well-advised to look beyond low-CPM advertising to scale their revenues, too.