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@ Announcement: Free On-Demand Music Platform; CBS To Ramp Up Promotion

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I’m here at Studio 19 at CBS (NYSE: CBS) headquarters, as unveils its new direction: a free on-demand music streaming platform. Some quick details, from a press release that’s just been passed around:

— The company has signed deals with all four major record labels and 150,000 independents to offer free streaming of full length music.
— The platform will be ad-supported.
Each track can be listened to just three times; this was buried at the end of the release and it wasn’t mentioned until the Q&A. Following that, CBS Interactive chief Quincy Smith came to the stage and said the company was looking to extend this.
— Currently, the new service is only in the US and EU, but the company plans to launch internationally before long.

So the big announcement is not video, as we had originally reported.

After brief introductions from CBS CEO Leslie Moonves and CBS Interactive head Quincy Smith, founders Martin Stiksel and Felix Miller have taken the stage to explain the origin of the company and how it got to this point now. They’re showing a demo, which is accessible right now from the site. The key point is that this is simple: go to the site, type in the artist and press play. Miller: “Before, we didn’t have the ability to play these full track.”

For artists: Stiksel: “(We are) playing our role in redesigning the online music economy.” Labels and artists will get paid by the listen, so rather than one up-front payment, artists can get paid perpetually as their tracks continue to get played. The system is open to un-signed artists that want to upload their music and join the site.

For advertisers: ‘A mini billboard space beside every song’. Even without a user login, the company will be able to deliver targeted ads, based on the data the company has already accumulated in its years of service. CBS will use its ad sales resources to pitch advertisers. And right now, they’re confident that there will be plenty of advertiser interest. The types of advertisers likely to be on the site include auto makers, Coke, etc. There’s also an SEO play here, as the site wants to rank highly anytime a user searches for a given artist.

Limitations: is still fundamentally a discovery site. After a user has listened to one track three times, they’ll get recommendations for other music they might be interested in. Question: How will they monitor how many tracks a user has listened to? Answer: Not telling. No doubt, people will look for a way to circumvent this. And again, Stiksel stressed that they’d like to increase the number of listens if the labels were willing

Money targets: Quincy Smith: “As much as we can… we’ve made it economically so it’s going to work”

Video: Stiksel: “Already, we are working with music videos.” There will be more to come on that and new announcements shortly. The company does own the domain name Last.TV, though they’re not announcing plans to use that. I chatted with Felix about where the company stood with its announcement from last May that it would be incorporating video content from the labels. Short answer: “That’s gonna happen… hasn’t happened (yet).” Until this point, the company’s video strategy has revolved around user-gen video and videos from YouTube. Quincy Smith later made clear the site has been all-consumed with today’s launch, but that it was now ready to start churning out more news: “We’ve been relatively quiet for eight months, building the service and making these deals, now we’re doing an announcement a week out of these guys… I want you to be bored with the fact that Martin wakes up and ties his shoe.

Promoting at CBS: Smith: Radio and talk a lot. As the network covering the Grammys, CBS will be promoting heavily in the US. After the announcement, Smith put it to me flatly: “If you watch the Grammys you will be exposed to” While the announcement mainly centered on the full streaming tracks, this may be the real news, that CBS is now going to be pushing, introducing it more aggressively to the US audience. This is something Leslie Moonves has noted, when discussing the service, that for the most part, it hasn’t been exposed to US listeners. Obviously, if is going to be promoted during the broadcast of the Grammys, then that’s about to change.

Workforce: now has about eighty employees, five of which are in the US. The site has been drawing veterans of other firms, including AOL (NYSE: TWX), Yahoo (NSDQ: YHOO) and Skype.

More at the Last.FM blog and in the release.

9 Responses to “@ Announcement: Free On-Demand Music Platform; CBS To Ramp Up Promotion”

  1. tathataboy

    3 times playback, then you have to buy it. Not a bad deal. You get to hear the whole song instead of a sample, too.

    I don't see how this is a bad thing. The artist needs to eat; otherwise, why would they put their work out for purchase instead of just for free?

    I think there are better ways to do all this than But at least they're trying.

  2. PJ Brunet, this doesn't affect the webradio function, the one that plays songs randomly. This 3 times playback limit is only for listening to the 3.5 million specific tracks on-demand.

    I guess they could allow the labels or artists to choose themselves if they want to have that 3-play limit and I guess more and more artists might disable that limitation since they would obviously see they can earn more money through displaying more advertising letting people listen to the music as many times as they want.

  3. Flealick

    Charbox: They do offer a $3/mo. subscription to remove ads (I would assume this is more than they make off of one individual through ads, and would indirectly benefit the artist more). Apparently an unlimited streaming subscription is coming, but unless the details blow me away, I'll probably pass.

    One nice thing about the current subscription is, your friends (or anybody) can listen to your playlists free, too. If that carries over to their unlimited streaming subscription, I might bite, but I doubt it will.

  4. From what I understand, this is currently limited to the US, UK and Germany. More countries to come hopefully soon.

    You can stream each track up to 3 times until a popup asks you to pay a unlimited playback subscription (if you want to play the same song more than 3 times). I guess this uses IP adress and cookies to identify users who are not logged in.

    The subscriptions could bring even more functionalities such as (I am guessing) unlimited DRM-free downloads.

  5. Woaw.. awesome.. is one of the best things on the Internet right now, add to it on-demand access to all the music, this is awesome.

    They should give us a opportunity to pay a little extra minimum monthly fee (with voluntary option to higher the payment) to remove the advertising and to pay artists more.