Warner Music Group has pulled its content from CBS owned Last.fm:
"...the fees related to the existing free service have been far less than it had hoped. Last.FM pays the labels a fee for every track it plays and a percentage of the revenue it earns from advertising displayed while the songs are playing.... Moreover, it wants a cut of the advertising revenue on any page related to its music—such as discussion about a song—not just on the music player itself." - NY Times
COMMENTARY: The take down only effect full song streams; not the custom radio service, and Last.FM will find a way to satisfy WMG. But I predict that you'll see more similar disputes as labels and publishers once willing to experiment with music 2.0 services become disillusioned with...
the actual revenue received. We're also hearing complaints about the small percentage that labels get of ringtone sales. Universal is already experimenting with a direct sales model via Qualcomm in search of a higher revenue.
Two additional factors worth remembering: 1) payments from some music 2.0 companies don't always even cover contractual and statutory obligations and artists and managers are starting to wake up and 2) some startups may find it hard to keep their financial promises if finding dries up before ad revenue replaces it.
There may be a rocky road ahead.