• by Erik Sass  @eriksass1, July 11, 2008

Last.fm is officially launching an unusual new Artist Royalty Program that will pay royalties to unsigned or independent musicians and bands. The program was soft-launched in January, but the official launch marks another step in the evolution of a new model for the music business -- and it's located almost entirely online.

The online music platform, owned by CBS Corp., is the first Internet radio service to offer royalties to unsigned and independent artists. Musicians and bands can register for the royalty program when they upload music to the online platform, meaning that they will begin receiving royalties whenever their songs are played on one of Last.fm's dozens of streaming radio channels, or selected for on demand play by an individual.

According to Last.fm, since its soft launch in January, the Artist Royalty Program for unsigned and independent artists has received 450,000 uploads.

In April, CBS Radio and Last.fm agreed to share content online in a deal that allows the Internet company to stream audio from CBS radio station broadcasts live, while giving listeners from the CBS Radio Internet Network access to Last.fm's library of free online music.

The deal also merged ad sales for the two online radio services. Then in June, CBS Radio's online business merged with AOL Radio, making programming from all 150 CBS stations and all 200 AOL stations available to users of either service.

The new AOL player is powered by CBS Radio, which recently introduced an interactive console that allows users to skip songs and share music with their friends. CBS also assumed full responsibility for ad sales at AOL.