Last.FM has added a new on demand song streaming service with the support from all four major labels and 150,000 indie labels and artists from distributors including The Orchard, CD Baby, IODA, Naxos. Users can listen to a track free up to three times, after which they are pointed iTunes, Amazon or 7Digital for purchase.
The site also launched a new program for artists not signed with a label. They can upload their music to Last.fm and will receive payment every time a tracks is played. This allows acts without a traditional recording or publishing deal to offer their music free while still generating revenue.
"We're building a platform to help redesign the music economy, enabling artists and labels to earn revenue according to how people listen, rather than how they buy," said Last.fm's other co-founder, Felix Miller. "Now we can offer the arrangement to unsigned music creators too. For the first time, anyone can upload tracks and get paid when those tracks are played. It's a whole different model - one that benefits the artists, labels and advertisers - but most of all the listeners."
Napster had launched a similar service only to pull back after a year. But the move goes a long way in differentiating Last.FM from Pandora and other competitors although it may not be enough to make someone switch services. It will be most interesting to watch how others in the sector react.