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P2P radio goes titsup

Farewell then, Social.FM

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Social.fm, the company formerly known as Mercora, has closed down. The service, which allowed users to stream their music collections to each other, cites no reasons for shutting up shop.

Mercora was announced in 2003 by McAfee founder Srivats Sampath, and we first covered it the following year (report here). Mercora's subscribers were permitted to stream playlists to each other with certain restrictions: Users couldn't announce what they were going to play in advance, request songs from peers or repeat song sequences in a time period, for example.

The company was licensed from the start, however, creating a back-end database, identifying material being played, and paying US internet streaming royalties. Ominously, last year the company ditched the subscription model and adopted a me-too name: Social.fm.

Rival discovery services such as Pandora and Last.fm offered the instant artist/song lookup, while Imeem simply launched first, and worried about getting licenses and revenue later. The jury is out on whether any of these services are in themselves a viable, standalone business, or if they can only continue by being cross-subsidized by someone who is.

The problem is that when competing with free music subscription revenues are hard to find, and the low CPMs commanded by music advertising mean that for an ad-supported model a smidgen of money is spread around so thinly you could measure it in microns.

MusicAlly last week calculated that Last.fm's most-streamed song (Coldplay's Viva La Vida with over 130,000 plays) would have returned just over £30 in royalties to the band, had they signed up for Last.fm's Artist Royalty Program.

So increasingly, a lot of the web music services are beginning to look like "features" of somebody else's business. But whose? ®

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