aTypical Joe: a gay New Yorker living in the rural South

Friday, June 01, 2007

CBS and Last.fm

Om Malik wonders why CBS bought Last.fm:

I have been in touch with some folks who know the media business quite well, and they believe that amongst other things Last.fm could be CBS’s hedge for its terrestrial radio operations. CBS, thanks to the Tiffany Network, is widely viewed as a television company. Many overlook the fact that it owns 144 radio stations in 50 markets, a business that brought in about $397 million in revenues in the first quarter of 2007, and an operating income of $156 million.

However, radio sales saw a decline of 9% (maybe because CBS sold off 39 radio stations) and operating income declined 4% when compared to the first quarter 2006. The terrestrial radio business has been feeling the heat, losing the attention battle to iPods and the Internet based music services.

The situation isn’t going to get any better, as music continues to be available everywhere. A whole generation is growing up and turning a deaf ear to the traditional radio. Last.fm, however, is moving in the opposite direction - growing, mostly because of its social features.

It is a community of like-minded (or same taste) music lovers that continues to grow. To distort a cliché, let a billion radio stations boom. CBS could start making money with the obvious business of selling music, but the real thrill would be if CBS takes this (to use another cliché) wisdom of crowds, and turned it into a tool for programming its on-the-air play lists. (Rags outlined this theme in his post, Can social tools save plain ole radio?) (Also, Internet is the Deejay.)

If people-curated news sites like Digg can find traction, why not a people-powered radio. A Last.fm Top 20? If Les Moonves and his able lieutenant Quincy Smith play their cards right, Last.fm could become the underpinning for CBS Radio sometime in the future.