After all the online uproar about Warner Music Group pulling its music from last.fm, reading the comments of Jupiter's Mark Mulligan showed at least one person understands how companies negotiate. As opposed to Mashable, whose Paul Glazowski wrote "Warner has lost its senses" in an incredible, overreaction of a post. As opposed to a blog post that claimed "Warner’s (sic) are putting themselves in a dangerous position, one where the music of their artists is in danger of not being heard."

I share Mulligans opinion and couldn't have written it better. A sample:

This growing trend is not just about labels wanting to increase revenue and share in the success of new emerging platforms. (Nor is it new, taking equity stakes was standard practice for EMI in the pre-historic days of digital music). It is, perhaps most importantly, about the labels trying to secure their future.

These equity stakes are investments in all possible future scenarios, to ensure the labels have money in the game for each. It is possible that the online music market will be dominated by consumption based models such as Last.FM rather than transaction based distribution solutions such as downloads. In such a scenario, particularly if it precipitates a broader shift away from transaction based distribution, the labels will feel that they need to own some of the game to retain their margins. So, much as the labels may be licensing to new, edgier services, they’re not by any means taking uncalculated risks."

It used to be called "playing hardball," and Warner didn't invent the practice. When negotiating long-term deals for an unproven business model, it only makes sense for a company to hold out rather than cave or rush. A likely scenario -- not just a worst-case scenario, but a likely scenario -- is that last.fm will for many users become a substitution for buying music. Content owners need to negotiate rates with that in mind.

This whole thing begs the question, Do labels need to make deals with every Tom, Dick and Harry? If a service cannot afford the requested rates or match those paid by its competitors, is it wrong to deny one's catalog to that service?

Ignore the early days when labels wouldn't license to much of anybody, and ignore the high cost of acquiring catalogs and assume it's just a cost of doing business right now. What I'm talking about is the "obligation" some people think labels have to sign deals with whatever service comes down the pike. It makes for good debate fodder. I know many people would love to see labels license their catalogs with fewer stipulations and lower (or no) cost to stimulate ideas in the marketplace. If that's the next step in the evolution of online services, the current way of doing things is going to have to first fail miserably.

You know that ol' saying, "Your failed business model is not my problem"? It was first directed at record labels, but ironically it's going to apply to some music services as well. Because it simply exists, because CBS bought it for $280 million, does not confirm last.fm's business model, nor does it guarantee that last.fm will or should survive.

[music jobs] Brand and Online Marketing Manager at The Ascot Club/Am Only; Brooklyn, NY.