I used to pay for last.fm a few years ago; think it was £1.50 a month then, and you got the unlimited radio and a few extra things, so this isn't so bad. I actually switched to last.fm for my mobile music a few weeks ago, as I didn't/don't want to pay spotify £10 a month for the service. £3 is a lot less, and for my usage which is just “something random to listen to on the bus” it's worth it.

It may also be worth noting, that as an insentive to all of Last.fm's long term users (from when it was audioscrobbler) they have automatically upgraded the accounts to subscription for three months, free of charge.