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CBS Interactive-owned Last.fm is testing a new version of its free Internet radio service that’s powered by YouTube music videos.

Last.fm was one of the first streaming-music services to gain popularity, but it hasn’t been able to keep up with competition from Pandora, Spotify, Rdio, and others over the last few years. And like its brethren, Last.fm pays expensive licensing fees for its large library of songs.

I’m guessing Last.fm’s decision to integrate YouTube had something to do with those licensing fees. If Last.fm listeners are fleeing for other services, it would be difficult to justify the cost of having a wide variety of music available. However, with the shift to YouTube, Google fronts the bill for that content licensing, provided the service embeds the video player into its site.

Right now, Last.fm is enabling the new YouTube-integrated player for listeners that log in to see a banner at the top of the screen. This version is technically still in beta right now, and Last.fm is asking listeners to provide feedback, including new feature requests. For the most part, the new version is exactly the same, with the exception of the video player. I’d imagine the YouTube integration will also only be featured via the website, since YouTube doesn’t always have licensing to play videos on mobile devices.

Last.fm isn’t the only music service that’s attempted to cut back on licensing fees by integrating with third-party services like YouTube and Soundcloud. Stickybits Labs service Turntable.fm also decided to shift its licensing strategy before eventually shutting down months later. It’ll be interesting to see if Last.fm manages to survive now that it’s taken a similar approach.

Via TNW

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