If last.fm, etc. are providing so much value why are their margins so thin? Are they providing value less than 30% of the cost of the base product?
And now they're being squeezed from the other side. Life sucks right now for services that make content discovery and recommendations better.
The songwriters/artists/producers create the songs.
The record companies distribute it.
The "distribution plus" companies like last.fm distribute it.
Now they want Apple to distribute it too (quite reasonably).
Well, one of those distributors is going to have to drop their rates. I'd suggest the one that already takes most of the pie, rather than the poor "distribution plus" innovator squeezed in the middle. But, as we know, the record companies are insane and will not accept this suggestion.
Could they afford to do this if people weren't paying for music? No. Solution: stop paying for music in any form that ends up in the pocket of the big recording labels.
Spotify already have negative margins though so 30% wont work.