Founded in UK in 2002, Last.fm was developed as a music community and internet radio website which uses similar profiles to generate dynamic playlists for its users. It uses a music recommender system called the Scrobbler which helps gain insightful information on an individual user, including which songs he often listens to, which song he likes the most, how many songs of a certain artiste he has played over a certain period of time, which of his friends have similar tastes - thus, by focusing on what music each user listens to, it delivers personalized recommendations to every user every single day.
In US, UK and Germany, Last.fm is free with advertising for all its internet users. For other countries and other devices, users are charged $3 per month after a 30-songs free trial. However, Microsoft's Xbox 360 users get Last.fm free with a $50 per year Xbox Live subscription.
Incentivizing the current paid subscribers:
Last.fm could try to acquire more paying customers by incentivizing the current paying customers to become social multipliers. These subscribers could influence others in their circles/networks to try Last.fm (free first) and then convert them into paid users. There could be reward programs for the same, for instance, 1 month of free subscription to each member who can get 2-3 new people to subscribe. Essentially, a commission to be paid for new customer acquisition and brand propagation.
Converting current free users:
Since the number of free users of Last.fm is very high, it is important to convert these into subscribers. Since these users are already using Last.fm and are aware of its features, it will be easier to make revenues out of them than getting a new user base. A free 1 month trial should be given to free users - needless to say most users will sign up for it. At the end of the free trial period, there...
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