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1. On July 22nd, 2007 at 11:00 am
   Bill Wilson said:

   You need to agree to the terms and conditions.
   Digital Music Promotion and Broadcast Agreement between Last.FM and Label (“Agreement”)
   The terms of the Agreement in a nutshell:

   1.
   •You have permission to upload the material or You have obtained permission from the relevant rightsholder(s).
   2.
   •Last.fm may use Your material solely for its Internet radio streaming and on-demand service and for 30 second on-demand previews. If or when You make tracks or videos available for free download [and/or full-length preview] is up to You.
   3.
   •You or Last.fm can terminate this agreement at any time by: (i) You removing Your material using the facility provided by the Last.FM service; or (ii) one party providing the other party with 7 days’ prior written notice of termination.

   THE PARTIES AGREE AS FOLLOWS:
   The Digital Music Promotion and Broadcast Agreement

   This Agreement sets out the terms agreed between You and Last.fm Limited (’Last.FM’), with reference to the following facts:
   (a) Last.FM intends to promote sound recordings and musical compositions over the Internet on its online radio player and affiliated outlets, such as embedded Last.FM media players, blogs, social networks and next-generation consoles;
   (b) You own or have the right to exploit and license to Last.FM the videos, sound recordings, and any performance of any artist and/or performer embodied therein, together with any artwork and sleeve notes which You upload and provide to Last.FM (together, the “Licensed Material”).
   1. GRANT OF LICENCE

   1.1 Licensed Recording
   By uploading Licensed Material, You grant to Last.FM a non-exclusive, royalty-free licence (including the right to sub-license for all purposes related to the Last.FM service (for example, embedding the Last.FM player on third party websites (such as personal blogs)) during the Term (as defined in clause 4) throughout the Territory (as defined in clause 3) to communicate and make the Licensed Material and any thirty (30) second preview clip of the Licensed Material available on the Last.FM services and to record and otherwise exploit the Licensed Material as necessary for all purposes associated with the Last.FM service.
   1.2 Reserved Rights
   All rights and licences not expressly granted to Last.FM under this Agreement are reserved by You. Ownership of the Licensed Material shall remain with You or Your licensors.
   2. DELIVERY

   2.1 You shall deliver to Last.FM:

   1.
   a)CDs or uploaded digital copies of the master versions of each Licensed Recording (from which Last.FM shall be entitled to make copies for the purpose set out in this Agreement);
   2.
   b)All necessary, related artwork for use by Last.FM in connection with the marketing and promotion of the Licensed Material;
   3.
   c)A written schedule of the names and contact information of the author(s), composer(s) and music publisher(s) and performers of the songs embodied in the Licensed Material, together with any additional copyright information and metadata in Your possession or under Your control relating to such songs and the Licensed Material; and
   4.
   d)The following information:

   (i) Artist name
   (ii) Track name
   (iii) Version name
   (iv) Album name (if applicable)
   (v) ISRC (if available); and
   (vi) Any credits that You are contractually required or otherwise reasonably wish to provide to Last.FM to display on Last.FM’s website at www.last.fm (the “Website”) in connection with the usage of the Licensed Material under this Agreement.
   2.2 Last.FM requires the information set out above to ensure that Your music is displayed correctly and to enable Last.FM, where applicable, to report to collection societies so that the relevant payments can be made.
   2.3 Last.FM shall have no right to modify the Licensed Material, except that it may encode the Licensed Material.
   2.4 You can deliver the Licensed Material and the material set out in clause 2.1 above in the following ways:
   CDs
   Uploads
   Hard drives
   Any other digital carrier

   3. TERRITORY

   The world (the “Territory”).
   4. TERM

   4.1 The term of this Agreement shall commence on the date that you either deliver the Licensed Material to Last.FM or upload the Licensed Material using the facility on the Last.FM service, and shall continue from then until such time as You or Last.fm terminate this agreement by: (i) You removing Your material using the facility provided by the Last.FM service; or (ii) one party providing the other party with 7 days’ prior written notice of termination.
   4.2 You can take down the Licensed Material at any time using the facility provided on the service. By doing so, you terminate this Agreement in respect of such Licensed Material, as set out in 4.1 above.
   5. WARRANTY

   5.1 You warrant and represent to Last.FM that:
   (a) You are the owner or authorised licensee of the Licensed Material throughout the world and have obtained all necessary rights, clearances, consents, releases, waivers, and authorisations in respect of the Licensed Material;
   (b) You have full right and authority to enter into this Agreement;
   (c) There is no present or prospective claim or litigation in respect of the Licensed Material;
   (d) The use by Last.FM of the Licensed Material shall not infringe the rights of any third party;
   (e) Last.FM shall be able to obtain a mechanical reproduction licence in respect of musical compositions contained in the Licensed Material, which licence shall be available at no greater than the statutory or (if no such statute exists) customary rate in force in each country of the Territory;
   (f) You have cleared all rights and made all payments due to any performing artist, producer or contributor to the Licensed Material, that such payments are equitable in accordance with relevant legislation and that save in respect of any payments to any society established for the collection of royalties for the performance of musical compositions, no further payments shall be payable by Last.FM; and
   (g) The Licensed Material will not contain or originate any contaminated file, viruses, worms, Trojan horses or other similar harmful or destructive code or program.
   By ticking this box, You are warranting to Last.FM that as at the date when this Agreement is entered into, You are not a member of any collection society established for the collection of royalties for the communication to the public of sound recordings (for example, PPL in the UK) and that if You become a member of such a collection society You agree to immediately inform Last.fm and provide it with all relevant details of Your membership.
   By not ticking this box, You are warranting that You are a member of such a collection society and that You will provide Last.FM with all relevant information reasonably required by Last.fm for reporting usage of the Licensed Material to such collection society.
   5.2 You agree that the acceptance by Last.FM of the Licensed Material for inclusion on the Last.FM services represents the entire consideration for the grant of the licence at clause 1 above.
   5.3 Last.FM warrants that it has the full right and authority to enter into this Agreement.
   6. INDEMNITY
   You hereby indemnify and will at all times keep Last.FM fully and effectively indemnified from and against all actions, proceedings, claims, damages, costs and losses whatsoever made against or incurred by Last.FM in consequence of any breach or non-performance by You of any of the representations, warranties or covenants on the part of Last.FM contained in this Licence.
   7. OTHER TERMS

   The terms of the Website Terms and Conditions, also form part of this Agreement. Please read the terms and ensure You are familiar with them.
   8. RELATIONSHIP

   The relationship between You and Last.FM is of licensor and licensee and nothing in this Agreement shall be construed (i) to give either party the power to direct or control the daily activities of the other party; or (ii) to constitute the parties as principal and agent, employer and employee, franchisor and franchisee, partners, joint venturers, co-owners, or otherwise as participants in a joint undertaking.
   9. NO OBLIGATION

   Last.FM shall be under no obligation to stream or use the Licensed Material.
   10. MISCELLANEOUS
   All notices or other communications required under this Agreement shall be given by email to the relevant party at the email addresses stated below and shall be deemed to have been given on the date that the email is read by the recipient (evidenced by a read receipt automatically sent to the sender).
   Last.FM: labels@last.fm
   You: xxxxxx@blackoutrecords.com
   This Agreement is governed by and shall be construed in accordance with English law and in the event of a dispute the parties shall submit to the exclusive jurisdiction of the English Courts.
   Great, you made it to the end ;) We look forward to establishing a long term, mutually-beneficial relationship with you.

2. On July 22nd, 2007 at 11:04 am
   Bill Wilson said:

   And for the record? I will keep my catalog up on last.fm, pending further resolution of this matter.

3. On July 22nd, 2007 at 12:35 pm
   Russ Garrett said:

   Hi Bill,

   Last.fm has *always* had this clause in our labels agreement. When you originally signed up as a label on Last.fm, you agreed to the following clause:

   “1.1 You hereby grant to Last.FM a non-exclusive, royalty-free licence (including the right to sub-license) during the Term (as defined in clause 4) throughout the Territory (as defined in clause 3) to communicate and make the Licensed Recordings and any thirty (30) second preview clip of the Licensed Recordings available via the Website.”

   The document I pulled that text from was last updated 9 months ago. As you’ll notice, the wording is almost identical: this “new” ToS is simply a wording update to the original 4-year-old version - there’s no bait-and-switch involved here.

   It’s actually quite the opposite of what you suggest - this clause hails from the time when we had no money at all - we relied on the free music from our indie labels to support the service.

   The labels and artists who agree to these terms of service are overwhelmingly small and will gain much more in publicity from Last.fm than they lose in royalties.

   If you feel this is not the case for your label, you are more than welcome to contact our music department to renegotiate this.

   But bear in mind, this is the same agreement you’ve had all along.

4. On July 22nd, 2007 at 2:14 pm
   Bill Wilson said:

   Happy to have caught your attention. Yes, I’ve actually limited my catalog upload because i’m aware that I agreed to a promotional arrangement way back when.

   Here’s why I chose to bring this up now:
   1. Last.fm isn’t a start-up anymore, it’s part of the global media biz.
   2. I was instructed I had to agree with the TOS, so I read it more carefully.

   I was very interested in supporting your service as a start-up, as I considered Last.fm part of the team. We do right by you… eventually you’d do right by us.Where is the consideration to the labels and artists that helped you build your company before all the majors got on the bandwagon? It’s painful to me that we seem to have outlived our usefulness.

   However, with artists increasingly going the only route, don’t you think it would be fair to offer them the same compensation that you afford to major artists?

   The reasons a company like a SONY (for example) can negotiate rates is because of the deep catalog they represent. Indies are at a disadvantage because although we represent 30% of music market (if you include major distributed labels that own their own masters) we’re prohibited in the US from having our trade associations make unilateral deals.

   I’d welcome a chance to take this discussion to my fellow members of the media commtte of the A2IM (and MERLIN) and see where it goes. I also think that all indies would benefit from having this discussion in an open forum.. so how about it? How about a virtual town hall between some of our most articulate folks and some people on your side?

5. On July 23rd, 2007 at 7:48 am
   Jose Canseco said:

   Ah, the old “you can make more with the publicity than the royalties we would pay you”. Classic. I hear this shit from licensing departments all the time.

6. On July 23rd, 2007 at 8:43 am
   Christian Ward said:

   Hey Bill, you should check out this post, explains all…

   Streaming royalties for independent labels and artists

   Christian

7. On July 23rd, 2007 at 9:59 am
   bill said:

   Here’s the funny thing about paying Soundexchange. Last.fm paid SX according to the old small webcaster agreement… so what was that, $20k for all the tracks since your inception? In fact I I know that you held off on paying even that amount until you were probably 3/4 of the way through negotiation with CBS.

   So in the interest of transparency, or proving me wrong… Please tell us exactly what your payouts have been to SX vs. the # of tracks streamed to the USA. What about the lifetiime value of subscribers that CBS paid their investment on? We contributed nothing to that?

   Don’t spin this. We want meaningful revenue from meaningful contribution for being there and supporting you from day 1. Make a good faith payment to those of us who did help build your business. Even a few hundred dollars helps.

8. On July 23rd, 2007 at 10:09 am
   Joel said:

   I use last.fm to tell me friends about sweet new bands I like. If they don’t have songs uploaded then I don’t bother. I think its worth putting a few songs up that people can check out, maybe you will sell more records, get more fans. Why are the indies getting as greedy as the majors? Yeah money is important, yeah you need it to run the label but this kinda thing is what makes me not want to purchase major label releases.

9. On July 23rd, 2007 at 10:12 am
   Bill Wilson said:

   to summarize: I didn’t care when you guys had no money and were start up. now you have money. pay up.

10. On July 23rd, 2007 at 10:22 am
    Bill Wilson said:

    Joel, the “value of promotion” doesn’t hold water anymore. According to research conducted by NPD, people don’t purchase music because they can listen for free.

    You also maybe confusing greed with not wanting to get screwed. I had to stop putting out new bands because it simply got too expensive. Virgil had to move his label into his house. Money funds marketing. Money funds tour support. Money funds new amps and guitars for bands. I’m sure Toby from H2O would like a few more dollars to buy an extra pair of shoes for his kid.

    The greed is on the side of the major broadcast conglomerates who want something for nothing from the people that can afford it the least.

11. On July 23rd, 2007 at 11:16 am
    Elizabeth said:

    I only skimmed the agreement, but this seems to pertain only to granting of artist performance royalties, not to composer/publisher royalties, correct?

12. On July 23rd, 2007 at 2:34 pm
    On Last.fm and royalty payments | Clicknoise said:

    […] Clear Channel didn’t get away with it, and now Last.fm is taking heat for not paying out royalties to independent artists. Last.fm, recently purchased by CBS, is now heating up indie music business blogs with this policy, even though it’s been in place since the company started. […]

13. On July 23rd, 2007 at 5:10 pm
    Russ Garrett said:

    Bill,

    We’ve paid SoundExchange according to what their contract specifies. We have no legal obligation to do anything more, and we can’t even afford to do so: despite the sensationalism surrounding our purchase price, we are still a company operating at a loss - and for any money CBS invests in us, they will expect a return. We are not a loss-leader, nor are we a charity.

    I was wrong earlier when I mentioned that we didn’t pay the indie labels - we do pay royalties, whether this is via the PROs, via a seperate aggregator, or directly. I am not a lawyer for Last.fm, I’m just a long-time employee, and I’m concerned about people viewing us wrongly.

14. On July 23rd, 2007 at 10:25 pm
    The Grim said:

    If you’re fine with being stupid and giving away your music to a startup, then you should be fine with giving your music away to a huge company. It’s the same thing: They’re using your product and not paying you for it. No matter how much you want to try to filter it through your failing-label indie-underground ethos, you’re letting someone take advantage of you and your services. Period.

    This is like not really caring when you get butt-raped by a hobo, then when Bill Gates comes along and does it, you throw a big fit and sue his ass.

15. On July 24th, 2007 at 5:39 am
    Bill Wilson said:

    Grim,

    Music, especially punk and indie, relies as much on it’s community spirit and economy of favors just as much as it does on cold-hard cash. I’ve let little indie filmmakers use my music in their films gratis, I’ve given away songs to be used on various benefit records, such as one for post-hurricane- Katrrna animal rescue among many others. Many of these are handshake deals, as ultimately there’s no revenue from much of this- but I do it anyway.. to participate. That’s the difference between our “failing indie label ethos” and the “failing major label” one.

16. On July 24th, 2007 at 5:52 am
    Bill Wilson said:

    Russ,

    So you’re telling me that all labels earn exactly the same from Last.fm. SONY didn’t get a sweeter deal? I find that difficult to believe. You don’t give them a piece of your ad revenue as a kicker? I seriously doubt that.
    You have millions of listeners and streaming channels yet only paid SoundExchange as a “small webcaster”? If SoundExchange accepted that, then I guess it’s their fault for rolling over so easily. Just because your payment landed on the legal side of what I consider a gray area, doesn’t mean that it’s right or fair. Labels and bands are overextending themselves trying to keep up with a marketplace that expects everything for free.
    Pay majors, indies, unsigned all the same and I’ll shut up.

    Better still, post a history of your accounting with amounts and dates to all the PRO’s. Let’s see what you’ve paid and where it goes.

17. On July 24th, 2007 at 8:19 pm
    Fred said:

    Let’s be frank.

    The only royalties covered by that “royalty-free” license are the performance royalties for the performer/label and the songwriter publisher. That’s because that’s the only royalty that comes into play with streaming broadcasts.

    What that means is: sign the license and you give last.fm permission not to pay SoundExchange on your behalf, no matter what the “Head of Music” says on a forum.

    The sweetheart deals last.fm has with the major labels mean that last.fm will be paying less than the statutory performance royalty, and they’ll be paying that money directly to the labels. Any guesses on how much those artists will end up seeing when the money doesn’t go through SoundExchange?

    You think last.fm cares? They got their bargain, go get your own. EVeryone else can go hang. Remember how last.fm showed solidarity with the other Internet broadcasters on the Day of Silence? Neither do I.

    They made it clear. They’re a business and they are in it for the buck. There’s nothing wrong with that, but anyone who romanticizes a business the size of last.fm and thinks they really care about the people who produce what they sell at a profit gets exactly what they deserve from that “royalty free” license.

    Last.fm built a business worth a couple hundred million on music. They get the major label music at a discount and the indie music for free. It’s a great business model, but it feeds off the indie community and gives back “exposure,” which costs them nothing.

    Believe the “mutually beneficial” stuff at your own risk. That license isn’t a business deal, it’s a description of a food chain, and the artist ain’t at the top.