Today the CBS backed Last.fm announced on their blog that they would dropping their free service to mobile apps and home entertainment devices in favor of a subscription based model.
The Last.fm service will remain free for users of the website, Xbox Live, Windows 7 mobile phones, and users of the desktop application. Users looking for continued premium streaming support will now be asked to pay $3 per month or $36 per year, just like rival Pandora users.
Last.fm alludes that keeping up with the costs of expensive streaming is a losing battle, given their lack of an ad sales team to offset the costs. Which makes sense and is the same reason why 80% of Pandora's employees are part of their in-house ad sales team.
The reality here is that there are currently a dozen ways to get free radio online and just like there wasn't room for a dozen online pet stores five years ago, there isn't room for a dozen free streaming services today.
This kind of news is simply another opportunity for Sirius XM to pounce on. As refugees of other online music services look for a new home and perhaps more bang for their buck, Sirius XM needs to be there to welcome them with open arms... before someone else does.