Warner Music was one of the first labels to sign a deal with Last.fm to allow streaming of their music from the site, back in February 2007, back then it was for use in last.fm's smart radio application, but a year later all the music became available on demand. However in the last couple of days it looks like Warner have quietly pulled their music from the on demand feature, there haven't been any official press releases or anything I've seen. Journalists have contacted Warner regarding the music availability and Warner have confirmed that their deal with last.fm has expired.
My guess as to what this really means is that Warner are re-negotiating this deal, and most likely have been renegotiating since February. Now that they have financial investments in imeem, lala and myspace music the last.fm relationship probably doesn't look so favorable in comparison and perhaps they're shooting for more. I doubt they'll be negotiating for equity, instead they'll be shooting for higher per stream rates and unsurprisingly last.fm wouldn't like this. So, Warner is forcing the issue, and this is the result.
I don't doubt a resolution will be reached, but Warner can afford to wait, after all they have their investment in imeem and imeem is a far more popular site these days. They might even hope that this pushes some last.fm users to imeem, although judging by many of the blogs a large number of last.fm users have never heard of imeem. The reaction to last.fm's limited on demand service saw many bloggers (who clearly had aspirations to 'real journalism') praising last.fm's free ad supported services as a giant step forward, which is was for last.fm users who had never tried imeem in the months prior to last.fm's announcment of their more restricted service. (to be fair, that author had previously posted about imeem and didn't like it at the time, the conspiracy theorist in me also notes that CNET and Last.fm are now both part of the same company)
Actually, imeem is a great site to help you spot tech bloggers who don't have a clue, since it has a name that's nothing to do with music and because it's the biggest site in the internet music game. It gets overlooked all the time by bloggers who'll write huge articles about muxtape, songza or last.fm when they come forth with features that are core to imeem's site. Even big sites like techcrunch have a blind spot for it, writing several articles about a music site called 'meemix' which has clearly had some inspiration for their name.
Projectplaylist is another great blogger blindspot, the bloggers should take all their muxtape love and split it equally between projectplaylist/imeem (music lovers) and muxtape (lovers of minimalist design). Judging by the descending alexa/compete/quantcast stats for muxtape, interest in the site is already dropping off and users are probably going elsewhere anyway, in the end muxtape's brief popularity may have primarly served to alert the blogging community to these existing services. Of course this is where I point out that one of my earlier predictions for muxtape's legal future may have been wide of the mark since they were based on the assumption that muxtape's rapid growth would continue for more than a couple of months. It may still happen, muxtape had a bad month with bizarre database corruption and downtime at their co-lo so that could be partially responsible for their poor showing.