Growth Matters: Last.fm learns your music and gives you more
With all the gloom in the global economy, I got to wondering whether there is anything else going on in the world of business. I'm looking for growth because I think that's what will ultimately bring the economy out of the doldrums. Not surprisingly, that growth is coming from technology companies. In Growth Matters, I look at consumer technology companies that point the way to growth trends -- and in the process introduce services and products you may want to explore.
Do you wish you could find an online music service that would play only what you like to listen to? If so, it may be worth taking some time to visit Last.fm. I interviewed CBS Interactive's public relations specialist, Katie Gunion, who said, "Last.fm is a music service that learns what you love. Every track you play will tell your Last.fm profile something about what you like. It can connect you to other people who like what you like -- and recommend songs from their music collections and yours too."
The site is very popular. As Gunion said, "Last.fm currently has over 25 million unique active users per month and 825 million scrobbles a month (825 million times a month people tell us what they listen to -- or around 650 songs per second). Last.fm has extremely loyal and engaged users -- over 75% of users return to Last.fm within 24 hours according to Gunion.
But does this growth lead to profit? I don't know but it claims to generate revenues with advertising its biggest source. I interviewed CEO Martin Stiksel who explained, "When we sold to CBS (CBS) we were getting access to a very strong U.S. advertising sales force, excellent relationships with record labels, clients in the U.S., and a long history in radio and TV. As a result, we have been able to generate significant advertising sales targeted at our growing user base."
Last.fm's second most important source of revenues is eCommerce. As Stiskel said, "If a sale is generated from Last.fm on iTunes, we get a percentage of the revenue. We also have a concert calendar which can be personalized to the tastes of each person and we get a share of the revenue when the user buys a ticket from Last.fm."
Sounds like Last.fm is music to the ears of investors and customers. Have you used the service? If so, what do you think about it?
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.