We're starting with online music. No industry, except arguably the newspaper one, has been rocked (pardon the pun) more by the Internet than the music industry.

The online music decade started with Napster, a music file sharing service created by Shawn Fanning that operated between June 1999 and July 2001. Napster enabled people to freely share MP3 files over the Internet; however it quickly ran into major legal trouble. Napster was the subject of lawsuits in 2000 by touchy metal band Metallica and others. It was eventually shut down by court order, after several major record labels went after the service.

After Napster's demise, a P2P application called Kazaa became the most popular service for music file sharing. But it too eventually succumbed to record industry attacks.

Curiously, both Napster and Kazaa were recently reincarnated as law-abiding services. After years of re-launch attempts, Napster was acquired by Best Buy in September 2008 and was born again in May 2009. Meanwhile Kazaa turned into a legit music subscription service in July this year.

iTunes / iPod: Digital Music Goes Commercial

While Napster and Kazaa tried to skirt around the commercial imperatives of music, like paying artists, Apple took on the record industry in an entirely legal way. In January 2001, Apple launched a digital music player for music called iTunes. Then in April 2003, the iTunes Store was launched. It offered the ability to buy songs for 99 cents each, which had a major impact on the music industry.

Soon after Napster's demise in 2001, Apple launched what was to become a revolutionary device in the music industry. The iPod was launched in October 2001 and it became the most popular portable music player since the Sony Walkman in the 1980s.

Fast forward to 2009 and iTunes continues to evolve. In January Apple announced that iTunes would go DRM-free. In September 2009 Apple launched version 9 of iTunes, which included a Genius-like recommendation feature for apps and 'iTunes LPs' - a feature that brings liner notes and artwork to digital albums.

MySpace: Music & Social Networking

MySpace was launched in August 2003 and soon became a popular hangout for local bands, especially indie rockers. MySpace provided a way for those bands to promote their music and reach a wide network through social networking.

As ReadWriteWeb's Sarah Perez wrote last month, it was a virtuous circle for MySpace. The bands' presence on MySpace "began to attract a young, hip crowd of users who were interested in following pop culture, and, in particular, the up-and-coming artists they discovered while browsing through the network. Only eight months after its launch, MySpace began to experience exponential growth, as its users created profiles and friended others who would then, in turn, invite more users to join the social network. Thanks to the "network effect," MySpace soon became the place to be online. Everyone was there."

However by 2008, MySpace had ceded the social networking crown to Facebook. In 2009, MySpace is once again trying to reclaim its heritage as a music service. In October MySpace launched "Artist Dashboards" and integrated its music video vault with recent acquisition iLike.

Pandora & last.fm: Online Music Discovery

Online music services have flourished in the 'web 2.0' era, when the ability to find new music and share it with others via the Web became increasingly sophisticated.

Two services in particular stand out. One is Pandora, a free online music discovery service. Pandora was founded in 2000 and continues to grow, despite various legal issues over the years. As ReadWriteWeb's Frederic Lardinois noted earlier this year, Pandora derives its revenue from targeted audio advertising in its music streams and affiliate sales through Amazon's MP3 store and iTunes.

Last.fm is another online music discovery service. It was founded in 2002 and was sold to CBS in 2007. It continues to innovate in 2009, for example in May this year last.fm announced combo stations, allowing a user to create a station with up to three artists or tags.

Conclusion

This post and series was inspired by one of my favorite blogs and podcasts, NPR's All Songs Considered. They're currently looking back at the decade in music and much of the discussion is about how the Internet helped define it.

And it's true, when you think of music at the end of 2009 you think of iTunes, Pandora and last.fm - MySpace even. The record industry is still coming to terms with these and other changes.

Tell us your online music memories of the past 10 years. What's been your favorite online music product or service during that time?

We'd like your help in predicting the following: Will iTunes change its pricing from $.99 a song or go to a subscription music site by the end of 2008?

• Microsoft's Zune Pass music-subscription service allows unlimited music downloads for $15/month
• Every song sold on Wal-Mart can be played an unlimited number of times on most portable devices
• Rumors have surfaced that Apple is considering a $129.99 a year subscription service for iTunes

Your Music on Lala

You do not have to upload your complete music collection to Lala to be able to play it online. Instead, you download a small desktop client that goes out and looks for music on your computer that Lala already knows, which it then simply puts into your playlist. If Lala doesn't know the song, or if the song hasn't been licensed by Lala, the desktop client will upload it to the service.

Once your music has been uploaded, you will be greeted with a standard music player interface, where you can drag and drop songs into playlists, search your collection (which is very fast and easy), shuffle through your songs, and pretty much do anything you expect to be able to do with a desktop jukebox as well.

The only major restriction of the online music player is that it only displays 50 songs per page. The quick and easy search function and the iTunes like browser at the top of the page make up for this is some ways, but if you are used to just browsing through your collection, Lala will take some getting used to.

Music Store

The music store itself is interesting in its own right, though it is also derivative of its competitors. However, it comes with a number of interesting social features and, unlike in iTunes, you get one full play of every song before you are restricted to a 30 second sample. You can also buy the rights to play the song over the web for 10 cents.

Competition

There are, of course, already a fair number of stores that sell DRM-free MP3s, including Amazon and Rhapsody, while services like Imeem already allow you to play songs in full on the net with fewer restrictions than Lala.

Lala has also announced that it will release an iPhone application in the near future. With that, it will also take on Pandora and services like Simplify Media.

Lala's real advantage over its online competitors is that it is a one-stop shop that already holds all your music. The pricing model is interesting and Lala will surely get a lot of 10 cent impulse buys, but the real power behind Lala is in its ability to bring all your music together in one place on the net, just like iTunes did for the desktop.

In this post we explore last.fm's feature set, how it compares to MySpace Music, and what we can expect to see from last.fm in the near future. Richard Jones also discusses how last.fm has managed to avoid the legal difficulties that have plagued Pandora.

RJ: Well, we liked the Last.fm/YouTube mashup Tim Bormans made so much that we hired him! Internally we've been working on multi-tag search which is available at our Playground, which allows you to search for music using multiple genres (folk + rock + gabba, etc); also on Playground we've been tweaking our Musical Soulmates app, which you could possibly consider the prototype for a future Last.fm dating service ;)

And of course, scrobbling continues to be an almost default setting for new music services now - from Hype Machine to Muxtape (RIP) to Blip.fm to the new version of VLC (which has 4 million downloads already since launch a couple of weeks ago), it seems like everything has to integrate scrobbling now. Great for us obviously, and great for our recommendations which will continue to improve as more people scrobble. People are scrobbling at a rate of 800 million times a month currently.

RWW: In terms of features, Pandora is similar to last.fm, in that both services have great recommendations and allow the user to discover new music. Both are streaming music services, yet it just seems to be Pandora - of all the 4 major services we've discussed so far - that has been having legislation issues. Can you clarify for our readers how last.fm has managed to avoid those sticky issues, when Pandora hasn't? I think many people are confused about that.

Last.fm is about more than just online radio. We've got millions of tracks available free-on-demand as well, and beyond that there's a massive social network element to the site. We also offer videos, the biggest events listings on the web (personalised to your taste), and our own audio and video content under the Last.fm/Presents banner. So the point is, online radio is only one of the things we do, so the legislation affects us only in one particular area of the Last.fm experience. As online radio is pretty much the single focus for Pandora, it understandably hits them harder.

The wider issue here, of course, is that royalty rates are high, and the debate around this needs to continue so we can reach a mutually beneficial and economically workable resolution. We don't want to see legitimate online broadcasters stifled by this - it's not good for music fans, artists or the wider music industry.

RWW: Lastly, one of the most interesting aspects of online music is its ability for new artists to be discovered. It's something MySpace has done well in the past, but we get the sense the perfect solution hasn't been found yet. As our own Marshall Kirkpatrick asked recently:

"How about a service that scans my iTunes library and my online listening history, determines my genres of interest and then never plays music from artists I've already listened to. Or makes sure to play some that I haven't."

Does last.fm have a feature like that coming up? ;-)

RJ: Do you think Myspace has done this well in the past? As you can tell from my reply to your first question [see Part 1], I would argue that Myspace has been a rather difficult site to navigate unless you're after popular stuff - and it's possibly going to be more of the same on Myspace Music, as the major labels jostle for frontpage real estate and push more indie/obscure music off the page.

Our recommendation system is being constantly refined to give music fans the best music discovery service on the web. I think we've got that covered. What's equally important is that these artists being discovered, if they're Long Tail or DIY, get the same kind of licensing and royalty breaks that more established artists get, which is why our Artist Royalty Program exists.

We've been doing this for 6 years, as I said, which is why it's kind of funny to be talking about this now because of Myspace Music. They're just catching up to free-on-demand after we pioneered the model almost a year ago. Now they've got to figure out how to make it easy to discover music that suits your taste (sharing playlists is one thing, but how do you find that music to share in the first place?), which we've been doing since 2002. After that, maybe they'll start paying unsigned artists. I would hope all this will come to Myspace Music at some point in the future - but it's happening on Last.fm now.

See also: Interview With Last.fm Founder Richard Jones: Part 1, The Competition and Part 2, Business Models

In this post we explore business models in online music, both for last.fm and for independent artists looking to earn a living in this new Web-based music industry.

RJ: The opportunities are obviously huge, especially in terms of raising our profile in the US. We've been working with CBS on some hugely effective cross-promotions in the States, most recently the 'Listen Again' campaign in tandem with CBS Television shows like Swingtown - where viewers of the show were directed to Last.fm by an on-screen overlay when music was featured. 22,000 people came to Last.fm weekly, directly from the Swingtown call-out.

It's that kind of promotion that reflects how much CBS understands the Last.fm experience and how to weave it into their established brands in a way that makes sense to audiences on both sides.

The challenge is basically keeping up the pace to make the most of these opportunities! We're growing massively, over 100 staff in the London HQ now - including hirings from Microsoft, Amazon, Google and Skype, and a rapidly expanding sales force on both sides of the Atlantic.

RWW: What is last.fm's business model going forward? We've seen you release albums online (e.g. the latest Kings of Leon album) and you have advertising. And a related question, how will last.fm and CBS work more together on building revenues for last.fm? We imagine that will become more important part of your business model going forward.

RJ: Advertising continues to be the driving force, and we're working hard to create new kinds of campaigns that haven't been seen before. Last.fm functionality can be incorporated into our campaigns now - something we call "Smart Ads" (and we'll be unveiling the first couple of smart ads next week in fact.)

We're confident here because no one else on the web can do this stuff: we can draw on an incredible amount of music data, we've got a deep understanding of our users through their music taste, and an amazing developer team (both in-house and third party) who can create unique ad functionality.

What does it all mean for the user? They get an immersive experience that complements their day-to-day Last.fm experience, and is individual to them, making it much more engaging. Advertisers are really enthused about this. What we're doing now is working with CBS to continue to get that message across to all key brands in the US, continue to build our sales force and continue to build our profile.

RWW: Earlier in the interview [in Part 1] you mentioned that last.fm gives a share of revenue to unsigned and DIY musicians, via the Artist Royalty Program. But if you could put yourself in the shoes of an independent, unsigned musician, what kind of things would you do online to get your work out there and maybe, just maybe, even make some money out of it. Signing up to the Artist Royalty Program is obviously a start, but what then?

RJ: The Artist Royalty Program is just one of the ways you can utilize Last.fm as an independent musician. Upload as many tracks as you can, tag them well, join some groups to spread the word, kick off a Powerplay campaign to start the ball rolling, and the system makes sure your music reaches the right ears. Getting your music heard by people who are actually receptive to the sound you're making, in an effortless way, is one of the main benefits of Last.fm as an artist - and obviously ARP means you can actually see some revenue from it now too.

Leaving aside playing live (still the best way to build an audience - but I realise you're talking about online exclusively here), it's a case of creating an engaging, constantly updated web presence around your music. Blog, respond to your fans on whatever platform you're making your music available (and beside the obvious big-hitters it's worth looking at sites like Amiestreet and The Sixty One, both of which have communities of users who actively seek out new music to listen to), encourage people to remix/rework your tunes and create their own content from your stuff (Trent Reznor's a pioneering example here), and above all make sure you're offering people regularly updated content - whether that's blog posts, new tunes, T-shirts, whatever.

A great example of someone doing all this successfully is Jonathan Coulton - who incidentally has joined the Artist Royalty Program, which is exciting considering he has almost 1.5 million plays on Last.fm.

Part 3 of this interview, on Design & Features, will be published tomorrow.

See also: Interview With Last.fm Founder Richard Jones: Part 1, The Competition and Part 3, Design & Features

The most notable changes are a new homepage for the site and a modified navigation menu you see at the top of every page. Also some new features have been introduced. Summarising from the Imeem blog post:

Spotlight: features the latest music, videos and entertainment people are posting on imeem. Expect to see "exclusive new music, popular videos, and celebrity playlists from your favorite artists."

Discover: gives you personalized recommendations of music, videos, artists and people, based upon your listening and viewing habits and those of the people you are connected to in the imeem community.

Browse: offers chart-based browsing of any media content (music, videos, photos and more) based on its popularity site-wide. You can now filter by content type, genre, and popularity in the imeem community.

Artist Pages: You can now search to find new Artist Pages, which pull everything posted by the community related to that artist into one page on the site. Also features the complete catalog of content created by the artist and a list of who else is a fan on imeem.

My immediate reaction is that the re-design is less cluttered than the previous design. When I did a search on Nirvana, I discovered some videos I hadn't run across before and my favorite feature of Imeem - the playlists - are more easily accessed and explored. Also finding new friends based on music taste is easier.

The Artist pages are excellent, full of links and videos to delve into:

Up till now I've mostly just dipped into Imeem to listen to cool music I haven't been able to find elsewhere. In the past I've tried to navigate around and explore, but found the process difficult. This new design appears to encourage more exploring of music and linking with other people with similar tastes. So I'll be giving it another try as a music social network.

Add to this new design the existing innovative features of Imeem, such as the March launch of a developer platform that enabled read/write access to user information, widgets that can be embedded practically anywhere (unlike its competition MySpace Music), and rich apps like Fanbase (an Adobe AIR app that Atlantic Records created in collaboration with Imeem) and you have a site that continues to make listening to music online a pleasurable experience.

If you're a fan of Imeem, let us know in the comments what you think of the new design.

Is this a case of geek trends being at odds with mainstream? Or is it that the mainstream hasn't yet caught onto the cool music sites? Let's check out and analyze the stats from both comScore and our poll....

Note that last.fm isn't categorized as 'Internet Radio' by comScore and as far as we know, it isn't part of CBS Radio listed above. We asked CBS (which owns last.fm) to send us the comScore data they have on last.fm, and here it is for the same period:

Notable Trends

AOL Music, with 23.9 million unique visitors in July 08, is the strongest. It recorded a 56% increase over the past year, so its growth is very good. Yahoo Music is second with 18.7M uniques in July 08, however it has decreased 19% annually since July 07. Clear Channel Online, the largest operator of radio stations (amongst other things) in the US, is a clear third with 9.4M audience in July 08.

As for the online streaming sites that began as startups, despite its continuing legal woes and the fact it can't be heard throughout much of the rest of the world, Pandora's US growth has been very impressive: an 89% increase from last year, to 4.8M unique visitors in July. Its competitor last.fm had just over 3M unique visitors in July 08, and 62% annual growth.

We also checked Compete and their stats are fairly similar, in terms of the trends, to comScore's. Compete has Pandora at 81.8% annual growth, with last.fm at 72.6%:

So the overall trend here is that both Pandora and last.fm are showing strong growth. But AOL Music continues to set the pace. Yahoo Music must be worried about its decline.

ReadWriteWeb Poll: last.fm and Pandora Still Most Popular

Our poll asked: what are your favorite online music streaming services? We ran almost the same poll last year. The results have shown that there is more diversity this year in the number of online music services that our readers tune into. While Last.fm and Pandora once again came out a clear first and second (respectively), other apps made a strong showing. Last.fm got 19% and Pandora 15%. Last year last.fm was at 31% and Pandora 29%, although last year's poll wasn't multi-choice.

Of the smaller services, Highnote, lala.com, Seeqpod all polled at the 8-9% range this year. Non-radio services such as Imeem and iTunes Music Service drew around 4-5%, while small but trendy services Hype Machine and Muxtape both came in at 4%.

So last.fm and Pandora are still favorites among the early adopter and tech-savvy people that read our site. But it's great to see so much interest in the many new online music startups (some of whom we didn't manage to fit into our poll, it must be said). As a matter of interest, here are some Compete stats for a few of the well performing smaller sites in our poll:

Hype Machine is perhaps the one to watch here, with 177% growth annually and on an upward trend. It grew 10.2% last month alone.

Conclusion

So AOL and Yahoo still dominate music streaming in the US, but last.fm and Pandora are beloved by many of our readers, and are growing fast in comScore too. We asked our panelists in our podcast show this week (link below) which sites they think will be popular this time next year. We'd like to ask the same question here. Do you see any dark horses amongst the smaller services, that may even show up in next year's comScore charts?

See also: Future of Online Music - Industry Players Discuss. This presents highlights from our podcast show earlier this week, in which senior representatives from Yahoo Music, Imeem and Rhapsody discussed online music trends.

In this post we feature some of the highlights from the show, which included many interesting factoids about Imeem, Yahoo Music and Rhapsody. But more importantly there was a lot of fascinating discussion of online music trends and where the music industry is headed.

The show started with a discussion about the killer feature set for online music, based on a post Marshall wrote recently. Marshall noted that the user experience in online music is not as good as it should be in streaming music websites.

In reply Lucas said that the listening experience has changed since around 2000 - e.g. people who follow mp3 blogs enjoy the personalities and the "constant sense of flow" of new music. In terms of streaming music, he said that there is a close connection between the songs and the community - it isn't intended to be decoupled. He said an ideal listening experience now is one that mixes music with fun, the social aspects.

Dalton said that Imeem started out as a social network, then the music came later - not the other way round. They slowly added music features, as people asked for them; and that has steered the product. He said that online music shouldn't be about consumption, but online community and self-expression. He thinks sites that are primarily community focused, rather than just listening to lots of music, are the ones that have succeeded most in online music. He also said technical advantages are key - he pointed to Imeem's acquisition of Snocap and its upload technology.

Sean asked Dalton a bit more about how Imeem got into music. Dalton replied that originally Imeem was meant to be a social network where people could express their tastes in media, whether that be video, music, etc. But they have turned into a music specific site, due to how their market evolved.

Rob from RealNetworks talked about how Rhapsody has had success in web services. He said they're continuing to build out their APIs across a range of devices. He spoke about their partnership with iLike. He says music discovery, social networking and music creativity are important features these days. The way they do things is work on the backend and partner with lots of companies. One point that resonated with us was that online music services should work more together, in a federated way. e.g. you can move personalization data around and get recommendations across the likes of last.fm, Imeem, Rhapsody etc. He mentioned OAuth and OpenID as some of the standards being used to do this.

Developer Platforms

Lucas segued off Rob's point about standards, using that to point out a key difference between Imeem and Rhapsody. He said that Rhapsody is a 'pure play', it's for obtaining music. Whereas Imeem is a social network that uses provisioning to complement its strategy. So which of these two things will be better business models?

Rob's response was that Rhapsody has a developer program which it is using to expand its reach. He said that Imeem focuses on developers too, but they focus more on web developers whereas Rhapsody targets hardware developers too. Dalton agreed that they focus on web developers.

Marshall asked Dalton for an update about the Imeem developer platform and specifically how it compares to the "wide open" Seeqpod API, which has been leveraged a lot. Dalton replied that there are 2 ways the Imeem platform is encompassed - the 'off website' version and the 'on Imeem' one. The widget and embeds is being integrated into eg Slide's Top Friends, and Apture (a blog plug-in that features an Imeem player). In terms of the 'on Imeem' API, that hasn't been shipped yet. That will be similar to Facebook's platform, so that developers can build new media experiences inside Imeem.

Business Models for Platforms

Sean asked a question from the podcast audience, about what Imeem's business model is for their platform. Dalton replied that the vision is to make it mostly ad-supported. They also want to do rev share. They still have to complete building out the technology for ad serving for online music. He doesn't think the subscription model would work for their audience.

Lucas said there is a lot of skepticism in the music industry (labels, artists etc) about ad-supported revenue.

Marshall mentioned that recorded music is just a loss leader, and monetization can be made with tours, merchandise etc. Rob replied that for artists there is a lot of money in that. So he said there are really good businesses being built off the online music platforms - eg recommednation engines like last.fm, connecting artists to their fan base (e.g. iLike), Ian Rogers' new company topspinmedia.

Dalton said that at Imeem they're trying to change the relationship people have with music, focusing not on monetizing consumption, but monetising self-expression and attention in music.

Imeem screenshot

Lucas said that the value in online music isn't in the download, but in all the things around it - socialising, shows, etc. So the business is in supporting the user to do all those things.

DRM & Interoperability

Marshall brought up the topic of DRM. He said that there seemed to be 3 different points in the spectrum of DRM in online music:

a) Rhapsody embraces DRM the most and the requirement that subscription be ongoing;

b) Imeem playing in the middle with Google Open Social integration;

c) Yahoo focuses on open standards

So Marshall asked how long will big players be able to use their large audience to compete with small more open players?

Lucas said that he no longer speaks for Yahoo, but they've changed over the last six months to "embrace openness and become a connector". Yahoo Music eschewed its own subscription product and made a deal with Rhapsody. He said that interoperability with Imeem would probably also be a popular move within Yahoo. He said though that there is immaturity of current open products, specifically mentioning OpenSocial. Secondly, companies like Yahoo need to figure out how to make money from the open strategy. He said that Rhapsody's strategy is very open, but the big question is can that be extended to record labels and artists as well as users.

Rob didn't agree with the characterisation that Rhapsody was pro-DRM. He noted that at the end of June they launched a DRM-free music store (ReadWriteWeb coverage here). He also said that they're big supporters of the ad model. He also said that partnerships are an important part of their strategy, e.g. powering Yahoo Music and iLike (which gets them into Facebook). He told us that some demographics accept ads, but they've had issues eg with the Facebook crowd. So he said a blended approach is what they're pursuing - part ads, part track sales, part subscriptions, part discovery/buying track for your phone, etc. He said that music is a $10b market in the US, but so far only $1b of that is online.

Rhapsody DRM-free store

Legal Battles With Record Labels

At this point I asked a question about the legal issues with online music, specifically pointing out that there is a 'have' and 'have not' situation in online music currently - with larger sites like Imeem, Yahoo, Rhapsody being able to make partnerships with record labels and avoid the legal issues plaguing the likes of Pandora, Muxtape and other small startups.

Lucas said there are two markets emerging: large scale, partnerships with labels, big traffic but low profit margins (Yahoo, Imeem, et al); the second market is small scale, uses media like artist sites, works in the "grey area" in terms of legal issues, has smaller traffic but higher margins. He points to Hype Machine as an example of the latter, which isn't paying anything [to record labels]. He said these two margins are emerging in parallel. He said that Muxtape was a red herring, as it was trying to become a big service, i.e. get too big to fail and so cut a deal [with labels].

Muxtape woes with the RIAA

Lucas said in a couple of years the wall between the large providers and small ones will start to go away, as music becomes more "webby" and interoperable.

Dalton said that small companies need to steer clear of the major record labels in order to survive.

Rob said that the backend, platform approach will make this easier, as small companies can use the big platforms provided by Rhapsody and others. So that is one way to avoid the legal hassles of music acquisition from music labels. Dalton said that he agrees, noting that at Imeem they try to "abstract away all the complexity" around licensing and streaming and hosting. He also said they acquired Snocap partly to get access to their registry of music from the major record labels as well UGC (user generated content) music. This enables them to build a platform that scales from UGC music to major record label music. So he says there should be no reason for startups not to use a platform in a couple of years.

Marshall brought up the issue of international. Rob said it's very tough, they have enough problems dealing with US laws around rights to use music. He said Pandora has had lots of issues with international laws. He said it probably will be never fully global, so it will stay in "the grey area" for many countries.

Who Will be the Leading Online Music Services 1 Year From Now?

To wrap up the podcast, Sean asked everyone about the current poll we're running on RWW (see below). last.fm and Pandora are still the most popular apps with our readers, so Sean asked which apps will be the leaders a year from now?

Rob said that he hopes Pandora is still around and the statutory radio issues get worked out across the industry. He said there will probably be a number of new contenders, and he hopes there will be much more cross-service users (i.e. the ability to use more than one service).

Lucas said that Hype Machine has the opportunity to get pretty big.

Dalton said that the line between social networking services and music services is blurring, so he thinks apps that aren't just about music may become most influential - e.g. iPhone apps.

Marshall said he has high hopes for Hype Machine (our initial review and update) and also thinks Songbird (our review) has potential, with so many developers and an open framework.

I said that music discovery is key for me, finding new music. The likes of last.fm, Pandora, Imeem, Hype Machine are doing this for me now, but given Imeem's rapid growth recently there will probably be another 1-2 services that emerge over the next year that take discovery to the next level.

Hype Machine, beloved by a few in the panel

Listen

You can listen to the entire show here (select Episode 6):

Note about the podcast: We experienced technical issues with our podcast hosts Talkshoe during the recording, which affected our live listeners. Many people either couldn't login to the call or were thrown off midway through (including the host Sean!). We sincerely apologize for this, and we are looking into an alternative solution for upcoming shows. We're pleased to say though that the archived recording is 100% intact!

Vote

Don't forget also to vote in our current poll: What are your favorite online music streaming services?

Image: She sings, she sings by gwen

To listen in and participate in RWW Live today, click here or tune into the widget above. Select Episode 6 (note: currently Talkshoe is experiencing technical issues, we hope episode 6 will be available soon.) Update: episode 6 is now available.

Don't forget also to vote in our current poll: What are your favorite online music streaming services?

Note: there's no way we could mention every single online music streaming service in this poll, but if we happened to miss a major service then do shout it out asap in the comments!

First Android Phone Approved By FCC

This week, the news broke that the HTC Dream, the first handset to run Android (aka "the Google Phone") has been approved by the FCC. In the documents provided, it appears that we have now a release date for this highly anticipated phone: November 10th, 2008. So what will the HTC Dream offer? We take a look at some of the details and unknowns surrounding this device.

Mozilla Announces Best New Firefox 3 Extensions

Mozilla just wrapped up its Extend Firefox 3 contest and, after reviewing over 100 entries, its team of judges has announced the winners for Best Add-ons, Best Updated Add-on, and Best Music Add-on. In the Best New Add-on category, the winners were Pencil by Dương Thành An, Tagmarks by Felipe Tassario Gomes, and HandyTag by Rémi Szymkowiak, while the Best Music Add-on category was won by Fire.fm from Jorge Villalobos and Jose Enrique Bolaños. The contest was meant to showcase extensions that made use of the new capabilities Mozilla introduced in Firefox 3 and managed to combine this with excellent usability and the use of open standards.

Microsoft Launches Photosynth: Your Pictures in 3D

This week, Microsoft publicly launched Photosynth, its long awaited Live Labs product that allows you to stitch your photos together to create a detailed 3D environment.  While most of the computation is done on your desktop, the images are uploaded to Microsoft's servers and Microsoft is giving all Photosynth users a total of 20GB of storage for their collections. The rendering and browsing is done with the help of Seadragon, another Live Labs product.

Create a Tour of Web Pages with Agglom

Sharing web pages in a conversation shouldn't be as tricky as it is. Sometimes you're on the phone, or speaking to a group of people and there isn't a handy way to bring people along with you from page to page and then let them have easy access to those pages after the conversation is through. Enter Agglom, a simple little service built by Italian developer Enrico Foschi. It's a Firefox plug-in that will make sharing a list of links far easier than it's been before. Agglom is a remarkably easy way to create a "slide show" of live links that you can share with other people. See the screencast demo we recorded below.

Pandora On the Verge of Closing Shop

Pandora is an internet radio service that allows you to create your own radio station based on songs and artists that you like. While you can't necessarily pick and choose what you'll hear on the service, you can fine-tune your radio station's tastes by giving the songs that Pandora recommends a thumbs up or a thumbs down. Pandora on the iPhone is one of the best applications for streaming music and finding new tunes. So, what will the service's 1 million plus users do if Pandora pulls its own plug?

SEE MORE WEB PRODUCTS COVERAGE IN OUR PRODUCTS CATEGORY

Web Trends

What Would the Perfect Streaming Music Service Look Like?

Pandora's on the ropes, Imeem is taking off, Grooveshark relaunched today with recommendations and a long list of cool features, Blip.fm threatens to make Muxtape look like old news - the streaming music market online is expanding and contracting faster than a stadium rocker's pupils. What if the perfect service rose from the noise and gave you exactly the user experience you wanted? What would such a service look like?

See also: RIAA Takes Down Muxtape, Will Future Solutions Please Hurry Up & Arrive?

FriendFeed: Hotter Than Ever or Starting to Fade? (POLL)

No matter how you feel about FriendFeed, you can't argue with the fact that it has been one of most popular services among the early adopter set this year. For social media enthusiasts, the site fulfills a need to be always sharing, always active, always involved. In some cases, this led to a self-imposed information overload scenario - there was so much good stuff going on at FriendFeed that it was hard to turn away. But then, as people discovered the service's ability to hide items, they were able to better craft the FriendFeed (over)flow to their needs.

10 Promising Web Platforms

In this post we reviewed 10 promising developer platforms for the Web. We're not talking about the obvious ones either, like Facebook, iPhone, OpenSocial or even Twitter. Those have been covered extensively already. This list features some of our favorite 'lesser known' web developer platforms. There are many other excellent developer platforms that we didn't mention, so as always please use the comments to point out your own favorites.

What Three Web Apps Excite You Most?

Lachlan Hardy this week twittered an interesting question: What are the three things online that are exciting you most? Lachlan was asked this question as part of a newspaper article in the Sydney Morning Herald. His own answers were interesting, but he also got a great response from commentors on his blog. So we thought we'd ask the same question (well, slightly re-worded) here on ReadWriteWeb. There are literally thousands of great web apps to choose from, many of which have been profiled here on RWW. Check out the comments to this post for a lot of great suggestions...

SEE MORE WEB TRENDS COVERAGE IN OUR TRENDS CATEGORY

NEW! RWW Enterprise Channel

This week we introduced a new feature to ReadWriteWeb: a special 'channel' devoted to Enterprise web apps and trends. Bernard Lunn is the editor of this channel and he kicked it off with two compelling posts...

Enterprise 2.0: The Nature of the Firm

The break-up of behemoth, vertically integrated enterprises commenced in the 1970's, got a boost from junk bond financing in the 1980's, and accelerated in the 1990's with globalization. Now, late in the 2000's, Social Media (aka Web 2.0) is adding another gear that will accelerate the fundamental restructuring of the enterprise. This is a big story. That is why ReadWriteWeb is dedicating a new "channel" to Enterprise 2.0.

See also: 11 Things Startups Should Know About Enterprise 2.0

What is your position in the Enterprise 2.0 market. Do you work in IT in a large Enterprise? Do you work for a large incumbent Enterprise IT vendor? Do you work for a startup that is going to change the Enterprise world? Are you writing about this rapidly emerging market? Do you have unique insights or research to share? We would love to hear from you in the comments to these posts and maybe as a Guest Author. Email us if you're interested in writing for ReadWriteWeb's Enterprise Channel.

You can subscribe now to our special RSS feed for the Enterprise channel.

That's a wrap for another week! Enjoy your weekend everyone.

As SfGate.com reported tonight, Imeem is the third-largest social network in the United States after MySpace and Facebook; and it's now the No. 1 streaming music site in the US.

King of the Online Music Deal

There's a lot to like about Imeem. Starting with the music. As we noted in March Imeem has licensing deals with all four major labels and "80% of the indy music market", which means that you can find almost anything you want on the site and listen to it for free.

The user experience is also great - it's also another of an increasing number of sites powered by Adobe's Flex and Flash technologies. And check out Fanbase, an Adobe AIR app that Atlantic Records (a subsidiary of Warner Music Group) created in collaboration with Imeem. We reviewed Fanbase recently and said it is "no ordinary desktop music player". We explained that instead of simply streaming tunes, Fanbase lets you connect with other users through an integrated chat feature while also viewing a continuous feed of both the official and the unofficial news, photos, and videos. You can also customize the app by choosing which artists you want it to display from the dropdown menu or the "Manage" screen.

Imeem Lording it Over MySpace Already

Imeem is leading the charge in the free, ad-supported online music market. It has deals with all four of the major record labels: EMI, Universal, Sony and Warner Music. In contrast, MySpace only has three of them - EMI hasn't signed with MySpace. What's more, according to SFGate Imeem also has a deal with Viacom's MTV Networks to show videos from Comedy Central, MTV and VH1.

Together with the launch of its platform in March, Imeem also has an extensive widget program in place. This means that Imeem music can be listened to on a wide range of websites - giving it another advantage over MySpace.

Imeem has a second-to-none pedigree in Internet music, having been started by people from companies like Napster and Tivo, and acquiring Napster founder Sean Fanning's Snocap late last year. To be fair, MySpace has a pretty decent background in music too - it was said to be the driving force behind MySpace becoming popular in the first place.

In terms of users, Imeem had more than 27 million unique visitors in June according to comScore and it has 65,000 new users register each day. The company also says it gets more than 85 million total unique visitors of its widgets. These are impressive stats, although MySpace is still much bigger - with an estimated 120 million users.

But Can it Earn Money?

It's not necessarily all rosy. According to a recent CNN article, Imeem may struggle to earn a decent revenue. It estimates that Imeem is getting an average CPM of $4 per page, which CNN thinks is insufficient to pay the record labels. CNN states that the major labels control 86% of all album sales in the United States and that they "generally want to be paid about a penny each time someone listens to one of their songs at a website like Imeem." However Imeem counters that they have "ad revenue-sharing" arrangements with the record companies, rather than the standard penny-a-song contracts. Also Warners has invested in Imeem. The same CNN article estimates MySpace Music revenue will be around $3 CPM, so even here Imeem seems to have the upper hand.

Both Imeem and MySpace will continue implementing alternative revenue models. For example Imeem had a deal with movie star turned musician Scarlett Johansson, who released her album "Anywhere I Lay My Head" exclusively on Imeem in May.

Conclusion

There's no doubt that Imeem has serious momentum, and backing (Sequoia Capital and Morgenthaler Ventures are investors). With all 4 record labels behind it and an especially cozy relationship with Warners, together with traffic that is rocketing upwards, Imeem appears poised to tip big time into the mainstream. You cannot of course count out MySpace Music, it is a joint venture after all with 3 of the 4 big record labels. But Imeem's growth rate and buzz is reminiscent of that of YouTube just before it got huge.

Watch this space, or should we say listen to it.

As noted in our previous review, last.fm has had many navigation issues in the past. The new design is supposedly simpler, but the navigation issues aren't completely resolved - for example now a drop-down list has been added to the top right, but I'm not sure that's going to be intuitive enough for many users. Still, the new navigation is an improvement on the old one. Although it couldn't be much worse, in all honesty.

Here's a quick visual look at the evolution of last.fm's new design:

Current (new) design - the 'Lick of paint' design

Beta design circa June 08 - the 'Facebook design'

Old design

A reminder that last.fm is an online music service, which can be enjoyed via a desktop software app or within the browser. Last.fm is built on top of a very impressive music recommendation database called AudioScrobbler. See our February '08 post about last.fm for full details on how last.fm works.

Also last.fm recently released a new version of their public API, which allows any application or device to achieve deep integration with the Last.fm platform. Perhaps this is one of the reasons behind media player VLC's new support of last.fm, announced today too. Overall, it appears that the now CBS-owned online music service is keeping pace in the fast-moving web 2.0 world. Let us know your thoughts in the comments.

This paragraph sums up how value is being created on the Web today in media, mostly by teens:

"Today users are creating tremendous value and for the most part we’re ignoring it. They’re writing blogs about your artists, putting bios on Wikipedia, documenting last night’s concert on Flickr and video sharing sites, showing what songs are most popular by their behavior on Last.fm, building “box sets” on community sites, etc. How has the music industry leveraged this? What tools have you created to enable or encourage it?"

last.fm chart

Rogers does take a crack at a couple of competitors of Yahoo. He says (correctly imho) that Apple's "iTunes is a (mostly) context-free content experience". I'm not so sure that I agree with his views on Adobe - he says that "the entire online video industry is in the hands of one technology company (Adobe), being delivered the features they see fit on their timeline? That’s never a good thing." He also claims that Microsoft as a competitor to Adobe "is not exactly a recipe for openness."

The following slide from Rogers' presentation is a good summary of the open standards that he (and presumably Yahoo!) espouses:

Read the whole post for the full skinny. It makes a number of plugs for Yahoo! music products at the end, but I think that's a fair trade for an insightful article ;-) Also check out David Byrne's article in Wired, which is on similar themes. The big media world is inexorably changing - it's all happening on the Web right now.

Highlights this week: Richard MacManus ended 2007 with a review of the top 10 Web Tech stories of the year. Marshall Kirkpatrick produced an awesome toolkit to keep track of Web Tech trends in 2008; he also showed how to fall in love with tagging again and asked some big questions on privacy in the Web age. Josh Catone offered a guide to Online Giving to start the new year and he explored how the Web is affecting the US presidential primaries.

It was naturally a quiet news week, being the first week of 2008. But the Web had a significant part to play in the US Presidential primaries, which kicked off this week in Iowa. Josh Catone wrote pre-Iowa that if the web were an indicator of political results, then Ron Paul and Barack Obama would likely be squaring off in the US presidential elections next November. But with the first state contest out of the way, it looks like the web was only half right (any maybe didn't have much to do with it at all). Obama, who was in a statistical tie with Hillary Clinton and John Edwards according to pre-caucus polls, convincingly defeated his rivals. Paul, however, finished fifth - exactly where he was polling - and still no where near the winner, Mike Huckabee, who collected 34% of the vote to Paul's 10%.

Trends

What's Next on the Web: a ReadWriteWeb Toolkit for 2008

This is a MUST READ post by Marshall Kirkpatrick, in which he outlines 5 big topical trends in Web Technology in 2008. He also provides the following resources:

* An OPML file of top blogs on each subject. This is a bundle of feeds you can import into your reader.
* A filtered RSS feed of just the most popular items regarding each topic (using AideRSS). Remember, whenever you subscribe to new RSS feeds - some of the magic won't be visible until you mark all the initial items as read and new ones come in again.
* A Custom Search Engine that you can bookmark and use to search inside the top news and reference sites regarding each topic.

5 Ways You Can Fall in Love With Tagging Again

Tagging content online is something that doesn't seem to have taken off the way some people expected it to.

Is it too complicated for widespread adoption? Is it too arbitrary to have the impact that formal taxonomies offer? Is it just too much work while you're zipping around the web? Who knows - what's important is that tagging web pages can still be very useful!

Marshall stopped using social bookmarking tools for a big part of 2007 because saving things for his own future reference wasn't enough motivation to invest the time required. In the latter half of the year, though, he's seen what some other people are doing to make it worthwhile again. Here's five and a half ways you can fall in love with tagging URLs again.

Related: The Glory, Bliss and How-to of Screen Scraping for RSS

Is it Time to Declare Music Downloads a Loss Leader?

Radiohead's widely heralded experiment with free downloads plus a premium package and request for donations (effectively) remains shrouded in mystery, but Trent Reznor and Saul Williams released some numbers this week about a similar experiment. Those numbers indicate that very few people want to pay for recorded music these days.

Related: Threatened by the Internet? Music Biz Should Rock Like Librarians

Web Products

Songbird To Build Out Music Power-Browser

Songbird is a desktop music player Marshall been using lately instead of iTunes and he's really been enjoying it. Based at core on Mozilla technology, this week the company kicked off a 6 week campaign to build the 40 most-requested Firefox extensions for Songbird. This big burst of functionality could put Songbird over the edge as a music-lover's dream-come-true, though it's pretty close already.

Author Uses Amazon Kindle to Beta Test New Book

In his former occupation as a programmer at Microsoft, Daniel Oran developed the "start" button for the Windows 95 taskbar. As an author about to publish his second novel, Oran continues to innovate, this time by using the recently released Amazon Kindle e-book reader to let early readers help him refine a draft of his latest book. Oran's use of the Kindle is one of the more interesting we've seen, and really demonstrates the device's read/write potential.

Related: Yahoo! PDF Ads In the Wild on Kevin Kelly's Latest Book

RWW Network Blogs

last100

On our Digital Lifestyle blog last100, the big news this week was Sony BMG’s decision to, in part, ditch DRM and start selling tracks on Amazon MP3 without copy-protection. That makes four out of four, with Sony BMG joining the other major labels: EMI, Universal Music and Warner (as predicted in last100's Digital Music 2007 year in review). In a follow up post, Daniel Langendorf asked where this leaves Apple’s iTunes Store?

On the Internet TV front, Netflix made a splash with its announcement of a partnership with LG to deliver movies over the Internet directly to a TV.

In their main feature-post this week titled ‘Mobile: the Year of Wireless hasn’t arrived — yet‘, last100's Dan Langendorf took a hard look at the changing face of the mobile industry (particularly in the U.S.), calling 2007 part of the transition years — with much bigger changes yet to come this year and realized in 2009.

AltSearchEngines

This week on AltSearchEngines, there were two interesting sets of posts: the first was a pair of very telling posts about vertical search engines. The message: verticals are no longer "gaining strength," they have now arrived.

Also this week ASE investigated ChaCha - with a review of ChaCha's mobile launch, followed by Natalya Murakhver's interview with ChaCha CEO Scott Jones.

That's a wrap for another week! Enjoy your weekend everyone.