Open-source playlist software Playdar, developed by Last.fm co-founder Richard Jones, could save webcasters licensing and bandwidth costs by tapping into the music listeners already own. The software uses XSPF, shareable playlist files based on XML, to automatically find music stored on users’ computers. This means, said Jones, that a service like Pandora could play a user’s locally-stored music file rather than stream songs the user already owns, thus saving Pandora a per-performance royalty fee. Customizable streaming services like Pandora, Last.fm and Slacker could especially save money by incorporating Playdar, because users commonly set up stations “around the same artists they have in their music collections,” Wired’s Eliot Van Buskirk points out. “Playdar technology can enable interactive radio services to shrink their licensing and bandwidth costs. And in a slim-margin business like online music, every bit (in both senses of the word) counts.” Explained Jones, “It’s criminal that companies like Last.fm, Pandora, Spotify, and Rhapsody are paying to stream content to people when they already have that song locally.”
Think about how cheap it is for Apple to provide music to you by streaming your own MP3s on your hard drive, given that it doesn’t have to spend money on either court costs or licensing deals, nevermind the normal costs of cloud computing services like MP3Tunes.