Last.FM and CBS

CBS paid $280 million to buy the social networking site Last.FM.

Sites like Last.FM and Tim Westergren's founding effort -- Pandora -- represent "an" aspect of the future of radio because fans can in effect program their own music and these sites are social networking sites - very significant with the next generation.

The name Last.FM is a little creepy seeing as how a traditional media company is buying it. Maybe Next.FM would be a better name.

As RAIN Publisher Kurt Hanson told his readers yesterday, "Whereas Pandora operates by creating playlists based on songs' musical characteristics (tone, tempo, instrumentation, etc.), Last.FM creates playlists based on matching up the musical tastes of similar users."

Kurt also points out that the newly-acquired Last.FM will not be under Dan Mason's division. It will be part of Interactive.

One thing that troubles me is CBS' mention of potentially looking into synergies with their radio stations. I hope not.

The next generation hates radio. They love social networks.

I know I am paranoid about anything interactive that is purchased by a traditional media company like CBS. If they plan synergy with radio, radio better be involved in a major way.

I have never been a fan of interactive divisions and separate traditional divisions. It reminds me of six to ten years ago when the IT guy was in the back room while everyone else who had input into running a radio station was involved and visible. I still think that segregation was a factor in radio being late to the Internet space. Same still holds true about mobile.

You have to make Internet and mobile a part of the product, marketing and sales. In other words, they don't exist to which a company simple outsources problems. They be on an equal status with others to help create product and revenue.

Fortunately, CBS says it will keep the Last.FM staff in tact. CBS certainly doesn't have the skills to run that company.

All in all I like the CBS acquisition of Last.FM for its potential, but I'm on record as saying it isn't going to be easy to make it pay off.

You don't have to look any further than the CRB royalty dust up that threatens to put social networks like this either out of business or in harm's way. CBS has the money to pay insane royalty fees. Whether they want to or not is another issue.

And Pandora should not be threatened with extinction because the CRB standards are so grossly unfair.

Pandora invented this genre.

The entertainment business needs innovation.

The music industry's ultimate fate depends on it.

So before anyone gets too excited about the potential of the social networking niche occupied by CBS' Last.FM and Westergren's Pandora, they need to get more Congressmen to join the fairness love train that must leave the station with all aboard or this deal and others like it will go nowhere.

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