Last.fm + personal data = excellent music

Last.fm has a really cool music recommendation and social network platform that operates by tracking what I'm playing in iTunes, Yahoo! Music Engine, Windows Media Player...whatever. 

The premise of the platform's value is that it gets better the more data I give it.  There's an obvious and direct correlation between what personal info I'm giving to Last.fm and the recommendations they give back to me.  I can even see what data they are collecting.

Similarly, the iTunes store now makes recommendations at the bottom of your screen.  It does so by looking at whatever you are viewing in your library and making the Amazonian-style "People who liked this also liked..." kind of recommendation for related albums you can buy.  

But Apple raised several eyebrows with this trick.  From BBC: "Privacy advocates complained that Apple had not done enough to warn people about the information that was being collected, nor what was being done with the collected data."

Everyone in the media business is trying to extract more money from current users, as the margins on new user acquisition look uglier and uglier all the time.  The idea is to get your current users to click on more pages or to buy more product.  It's all about increasing engagement metrics.

Well, it's no secret that people respond well to good recommendations.  We've all been caught in Amazon's trap and ordered an extra thing while placing an order.  You could always justify a few extra bucks on it, too, "I was going to get that anyhow."  

The trade off seems fair on both sides.  I let you track what I'm doing, and you show me something I don't know.  If I don't spend 20 minutes reading your privacy policy, I'm going to have to trust that you don't betray me with the personal data I offer you.

Apple freaked everyone out by being opaque with their iTunes recommendation data.  Jobs himself had to step in and clear the air.  Is Apple giving me recommendations because it wants me to be happy or is it doing so to make money in other ways that I'm not privvy to?  

Motivations must be clear when dealing with personal data, and you have to give your users insight into what is happening with that data.  In an increasingly trust-driven economy, Last.fm will get my business over iTunes any time I'm given the choice.

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