Both Last.fm and Imeem have been buzzing about the recent agreements struck with major record labels to allow live streaming of whole tracks and albums. Today, Last.fm made a big announcement that whole albums are now available from a rather extensive catalog of music -- free for users -- and the artists get paid. How does it work? Here's how they explain it on the last.fm blog:

Free full-length tracks are obviously great news for listeners, but also great for artists and labels, who get paid every time someone streams a song. Music on Last.fm is perpetually monetized. This is good because artists get paid based on how popular a song is with their fans, instead of a fixed amount.

We will be paying artists directly.

We already have licenses with the various royalty collection societies, but now unsigned artists can put their music on Last.fm and be paid directly for every song played. This helps to level the playing-field—now you can make music, upload it to Last.fm and earn money for each play. If you make music, you can sign up to participate for free.

We’re not printing money to pay for this—but the business model is simple enough: we are paying artists and labels a share of advertising revenue from the website.

Today we’re redesigning the music economy. There are already millions of tracks available, and we’re adding more every day. We will continue to work hard to bring this to everyone in the world.

Click here for the whole post from the Last.fm blog.

Redesigning the music economy, sounds promising. Now if we can only stimulate the market economy which has been dipping faster than the bartender's shoulders at a Kennedy reunion.

Update: I tried it out and was pleased to find some of my favorite all time albums...accessible from anywhere! Listen to Miles Smiles and you will too. Kudos to Last.fm!

As a follow-up to my post about the slow death of major record labels, the Economist offers a logical argument for the downfall of the recording industry:

"...because the majors are cutting costs severely, particularly at EMI and Warner Music, artists are receiving far less marketing and promotional support than before, which could prompt them to seek alternatives."

Hidden in the article is details on EMI cutting slack from the budget. When the new CEO took over a few months ago, he questioned why the company was spending half a million dollars on "Floral Arrangements." It was widely known in the company that these fancy flowers were actually party favors for bands -- spent on hookers and cocaine. But after reading the articles, I wonder if it was really bands using the coke or the record label execs helping to kill themselves a little faster.
Looking beyond the iTunes pay-for-tunes digital model, many of the record labels are exploring ad-supported and subscription strategies. The top four record labels have all signed up to allow iMeem to stream their catalog of music free with advertising.

Pew released numbers this week showing that online video viewing traffic doubled this past year.

"48% of internet users visited video sharing sites such as YouTube, and the traffic to these sites has doubled on a typical day. For comparison, in December 2006, only 33% of internet users said they visited video sharing sites."

These metrics show that people are increasingly tuning into the web while turning off the tv. For example, in the UK about half of youtube viewers say they watch less tv as a result of online video. However, as I've blogged before, the number of users that contribute content remains extremely small.

Poor album sales send record companies into a spin - The Boston Globe

Album sales were down 15 percent from 2006, according to Nielsen SoundScan - tripling last year's decline of 5 percent compared to 2005.

I'm stunned that the Boston Globe seems so suprised about the slump in cd sales. And equally surprised that they have no clue what's going on in the music industry. It's really quite simple. People are sick of the old paradigm, and no longer accept the industry's terms. Digital players have brought music to the masses, but they have a sense of power that never existed before. If the music industry ever gets wise, they'll realize that complaining and suing their target audience isn't helping their case. What we need is an industry that's ready to accept that unrestricted digital music can be a social good that people are willing to pay for if they like it. We need more music subscription services, more iTunes modeled self-serving, more personalized services like Pandora and Last.fm. What if music was a service that you can pay for just like your cellphone or cable bill?