Monthly Archive for: ‘May, 2007’

CBS buys for $280m, plans more ads

As hinted at back in February, has been trawling around looking for a buyer and today it found its harbour in the form of a US media giant. The ‘social music’ site has been bought by CBS Corporation for $280m (?140m). This is less than the earlier rumour, but still the largest-ever buyout of a UK-based “Web 2.0” site.

The site was founded in the UK five years ago (you may have heard the stories about the founders sleeping on the office roof in a tent when they couldn’t afford accommodation). It now has more than 15 million active users. Users basically connect with other listeners with similar music tastes, build their own personal radio stations and watch music video-clips.

Although the announcement today says that’s managing team (founders Felix Miller, Martin Stiksel and Richard Jones) will stay and the site will maintain its own separate identity, I can’t see this staying this way forever, now that it’s part of CBS, which will probably ditch the European sensibility of the service.

Stiksel reportedly said: “This move will really support us to get every track ever recorded and every music video ever made onto” He also says LastFM will “put the users in charge. CBS gets this.” Time will tell, time will tell.

Meanwhile for the less cynical among you, here is co-founder Richard Jones on the company blog today:

“The team here have spent a lot of time this year discussing what the future should hold for, and while contemplating raising some additional venture capital we were approached by CBS. As you can imagine, we have been approached numerous times in the past few years from all the usual suspects regarding acquisitions and so on; CBS are one of the few companies who needed no explanation of what we are doing, and we were impressed at how progressive their plans are. This deal with CBS gives us a chance to really make shine, and gives us more flexibility than other funding options would for doing all the crazy stuff we?re had scribbled on whiteboards for years.”

So why did CBS buy it? CBS radio is the largest radio group in the United States, with 179 stations in the top 50 markets, but traditional media growth is stagnating and all the action – as everyone knows, especially when it comes to music and the youth market – is all online. The purchase thus adds to an advertising portfolio that already includes conventional radio, broadcast and cable TV and outdoor services.

CBS now has a strategy of reaching as big an audience as possible, not on creating content. It sounds like they plan to rely more on the users and viewers themselves to do that. In fact, CBS CEO Leslie Moonves says’s community play us “central to CBS”. In truth CBS is coming late to the now established idea that music is a natural community builder and therefore a very ‘sticky’ eyeball attractor. As an anonymous CBS executive has already said: “We see it as a chance to get new eyeballs ? or in this case earlobes.”

As for the price, it looks easily affordable by US standards. Consider some earlier deals: News Corp bought MySpace for $580m (?290m) in 2005. Google paid $165bn (?82bn) YouTube in 2006. But according to the LA Times, the final price for closely held could rise substantially if performance targets are met. got its first round of funding last May from Index Ventures.

There may be a problem for LastFM in that in the US the recent ruling by the Copyright Royalty Board massively increases the royalties Internet broadcasters have to pay for streaming digital songs. This has already hit Pandora‘s plans to expand outside the US.

However advertising may offer more hope. Although LastFM recommends music for purchase, sales are not in fact a big revenue earner. Instead CBS will probably create sponsored channels, garnering bigger corporate deals with its existing sales contacts.

Expect also CBS radio stattions to start to appear on LastFM. Country AND Western anyone?

Jericho Fans are Nuts

In keeping with the spirit of the show, “Jericho” fans have sent over 13 tons of peanuts to CBS executives after the brass cancelled their favourite show. Many of these fans, who write fan fiction, have seen the success of

Emotion in Games 2

I have been listening to an interesting Game Theory podcast with Nicole Lazzaro from Xeo Design, a company who does research work and consultancy on emotion in gameplay. Here is an excerpt where she waxes lyrical about innovation in gameplay and the kinds of emotions we want to explore in games of the future:
…next […]

Google buys Feedburner to sell ads into RSS


No wonder Google has acquired RSS management service Feedburner. FeedBurner publishes feeds for PC World, Computerworld, Macworld, Reuters, USA Today, AOL, Newsweek and many many more big and small publishers. That means the bulk of the content from these sites passes through Feedburner, and what does Google love? Content and data, but especially eyeballs. According to TechCrunch (following an unconfirmed rumour on Vecosys) Feedburner is in the closing stages of being acquired by Google for around $100 million in cash. Google has effectively bought Feedburner to get into the RSS Ad market. The growth market for ad inventory – though still small outside of the tech sphere – is increasingly found in people reading site content via start pages like Netvibes, RSS services like Bloglines or RSS readers like NetNewsWire. These people never visit the actual sites, and yet their content needs to be monetised somehow. This is a threat to AdSense, which only appears on sites, not feeds. The answer? Buy a service like Feedburner, which had already set up its own advertising service. Bully for them.

LAMP VI hits the spot

We’re currently in the midst of running our sixth LAMP cross media prototyping residential in Freycinet, Tasmania. It has been a very lively and challenging experience with creative teams taking part from a wide range of backgrounds with a dynamic team of mentors and developers. We’ve been very lucky to work with Tony Walsh, a […]

Joost hunts down talent, avoids UGC

Joost is hiring talent scouts Creative Artists Agency to get Hollywood programming onto its service. Along with well known programming and a clutch of top advertisers Joost wants to offer shows from independent professional video makers rather than “wild” UGC/social media. Joost has $45 million from five backers and signed Viacom and sister company CBS for content recently.

Lost on your iPod

Apple’s iTunes store has today released “Lost” the iPod game for play directly on any 5th generation ipod. Gameloft developed the Java game, with the writers of Lost, for play on a mobile phone, and now an iPod. The goal

From the Trenches

From the Trenches (John Wiley), brings together the movers and shakers from the world of emerging technologies. Seventeen business leaders and e-business luminaries, including FanTrust President Catherine Warren, open your eyes through the pages of this book to the future

Technology With Curves

Technology With Curves – Women Reshaping the Digital Landscape Inspired, informative and entertaining, the book Technology With Curves (Harper Collins) features the women who are reshaping the digital landscape — among them FanTrust founder Catherine Warren. Order the book

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