RMM

Last year I interviewed Spencer over at Last.fm to gain some insights into how they have so completely nailed the concept of exportable functionality. Functionality that works as marketing. And product development. And product enhancement. Oh, and brand extensions. In fact Last.fm have seemingly managed to create a self-fulfilling eco-system out of making their data freely available to their users and third parties to take and use however they want. Although now 12 months old the interview also neatly demonstrated how Last.fm has managed to create a marketing platform out of its product. Given current discussions on that area I thought it worth re-publishing.
A quick recap: Last.fm was founded in 2002 and in May 2007 it was bought by CBS Interactive for £140m (US$280m). The service uses its “Audioscrobbler”, technology to build a detailed profile of each user’s musical taste. It records the details of every track a user listens to on either Last.fm’s own streamed radio stations or on the user’s computer or music player. This information is transferred to Last.fm’s database (”scrobbled”). The database then makes recommendations of tracks to users based on the listening habits of other users who listen to the same tracks.

Last.fm COO, Spencer Hyman describes the service as having three components;

1. It is essentially a vertical social network, focused on music; a Facebook based on your music and musical interests
2. Its also the wikipedia of music; It can claim to have the largest online database of over 200,000 artist profiles created by users - the ultimate repository of longtail music content
3. And finally it’s a music delivery service; on demand through to basic radio services

According to Spencer, one of the key reasons Last.fm works so well is that here is a huge crossover between the services. A typical user starts listening and then builds a profile. They then start sharing (and so contributing to the whole recommendations functionality via scrobbling). Then the system helps the user to find new music by making recommendations. Its what he refers to as the virtuous cycle of LSD: Listen, Share and Discover.

This is where the truly symbiotic nature of Last.fm becomes apparent. As a natural side effect of their usage (Listening) of Last.fm, users are participating (Sharing) both implicitly and explicitly. The implicit contribution is made by what users listen to being scrobbled and so adding to the database of relationships. This adds to the basic smarts of Last.fm; the database of 140 million different tracks with over 20 billion items of relationships between these tracks which is what enables it to make recommendations (Discover).

The users also contribute explicitly in much the same way as they do on lots of Web 2.0 services. Through actions such as tagging tracks, contributing content to the wiki, uploading photos, adding to the journal, communicating through the Shoutbox and connecting to friends, users all contribute to the overall growth of the service.

Outsourced marketing; Widgets & Web services
Last FM takes its brand, its content and its functionality and shares it with the world in two ways; widgets and web services. The widgets are effectively a presentation layer to Last.fm’s data. The web services is a way of letting others take the Last.fm API and create totally new things. Providing this access to the API is essentially giving others access to Last.fm’s content and functionality. With this third parties can create completely new ways of seeing it and using it. To encourage this type of usage the web services are made available under a Creative Commons Attribution-NonCommercial-ShareAlike License. This provides the users with a legal framework within which to use these services and lets them know that Last.fm really do want them to reuse their IP.

By opening themselves up and giving others access and permission, Last.fm is essentially outsourcing part of its marketing to its fans and other interested third parties. With great results. The widgets and web services have been enormously successful in terms of building the user base. At the time of this interview in early ‘08 Last.fm estimates that activity around third-party applications on other websites has added 19 million music fans to its user base, in addition to the 21 million active users engaging with the Last.fm site itself.

Last.fm does a number of things to actively support these efforts. This includes a developer’s site that provides resources, tools and a forum for sharing information on developing applications using Last.fm’s webservices:

In February 08 Last.fm launched http://build.last.fm/ which organizes and showcases the many Last.fm applications and widgets that have been developed using the site’s open platform architecture and free webservice tools, which have been available since 2003.

Spencer highlighted three reasons that he thinks explain the popularity of the widgets and web services;

1. The Last.fm content is compelling - if you want to know about music - this is the place to go whether it is to find new music or to go deep into a music area.
2. Last.fm gives the power to the users and developers - user generated apps are a big part of all that Last.fm is all about.
3. Last.fm actively listens to what developers and users want. The company spends a lot of time on development and lots of time getting production people talking to external developers and talking to third parties

Widgets
The widgets take elements of Last.fm’s data and display it on another site. For example this widget can be embedded into blog pages and displays album covers of the most recent tracks that I’ve been listening to.

Widgets have their own section in the Last.fm navigation, and are clearly a significant part of how the service markets itself. Spencer explained that the widgets and web services are a primary function of Last.fm;

“We never believed it was a web only experience - and so have always had a client as a part of the service and have always encouraged users to express themselves through their music. The music profile widgets are just extensions of that ethos - that Last FM will be your musical life. In that sense widgets have always been a part of the DNA and history of Last.fm - they were there from the very beginning.”

The most popular widget, by distribution figures, is the music quilt, illustrated above. But we shouldn’t read to much into that as Spencer figured that was largely the result of it being there the longest.

Web services
Going a step beyond the widgets is the web services. The interview for this piece started out as a discussion of Last.fm’s widgets and quickly because an excursion into the really fascinating area of how Last.fm spreads its self and in turn gathers more data for its service through enabling web services. Last.fm have managed to turn access to their product into a marketing tool, a new product development environment and a source for improving the existing product. The more users the service gets the better it gets at recommending music and thereby keeping its users happy.

Third parties take the web services data and functionality and create new uses for it. This presents it to a larger audience who then input their preferences which then adds to the overall database of content and also adds to the awareness of Last.fm and thereby its audience.

An example of a web service is EMI’s Tune Glue. EMI has taken the API and created a site that uses the Last.fm data to let users
explore artists that are ‘like’ their selected artist using a very sweet graphic interface. It’s the same data - represented in a totally new and (45 minutes later) addictive way.

Another cute example is the IBM rocks project:  This uses the Audioscrobbler data to show what IBM staff is listening to in the
different offices around the world.

There is a great long list of all of the different web services that have been created here on the Last.fm wiki. Last FM actively encourages other companies to use their web services. There have been some nascent efforts to work with brands, although as Spencer points out this is just the start and that there are lots of other things that Last.fm could be doing with brands and music. So watch out for banded players, more exported functionality and data and more innovative use of music recommendations in marketing solutions. Because if the Last.fm formula shows anything it demonstrates that if you provide consumers with really useful functionality, they will take it, use it and spread it. And your brand along with it.