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Update: Analysts respond to Imeem's major label coup
·Dec 11, 11:16 AM
Posted by: Paul Maloney

After yesterday’s announcement of a revenue-sharing deal with Universal Music Group, analysts are responding favorably to the news that now gives music streaming website Imeem similar deals with all four major record label groups.

Forrester Research’s James McQuivey, in an report on the deal today from CNN Money online said, “2008 is going to be the year of music labels trying to put themselves in front of everyone, no matter what business model it takes.”

Many observers have characterized the recording industry’s response to the surge of digital music popularity as a battle between the company’s legal departments and their marketing departments, one which until now has dominated by litigation. A quote from the CNN Money report suggests that, at least in the case of Imeem’s latest coup, the marketers’ sensibilities are prevailing.

“We really worked to show the labels that they can benefit from an ad-supported music world combined with social networking,” said Steve Jang, imeem’s chief marketing officer. “Their marketing people have worked with us to promote artists, so they were already excited about how we present their content.”

Read the full text of the CNN Money article here.

[Originally posted on Monday, December 11] From the Los Angeles Times: “In a major increase in the availability of legal free music, the world’s largest record label has agreed to let users of a fast-growing website listen to its entire catalog of digitized music files.

“Universal Music Group struck the deal with Imeem.com, a music-oriented social networking site, in exchange for a cut of the revenue from advertising viewed while its songs are playing.

“The deal by the label for artists including U2, Amy Winehouse and Black Eyed Peas brings the last of the four major record companies to Imeem, which lets users listen while on the site but not download their own copies…

“‘We’re embracing the ad-supported business model. These are our crown jewels: on-demand, full-length tracks,’ said Universal Executive Vice President Rio D. Caraeff. ‘Imeem is the largest deal we have struck to date.’

“Caraeff said Universal was also in the ‘advanced stages’ of negotiations to license songs for free play on another popular music site, Last.fm

“‘The music companies and publishers and labels are willing to try more experimental royalty schemes, and that’s a great, great thing,’ Jupiter Research analyst David Card said. ‘Integrating social networking and music makes a tremendous amount of sense. It’s one of the things that made MySpace take off.’

“The labels prefer subscription models… But in the meantime, they are backing an increasing number of alternatives. The ad-supported licensing arrangements are the most radical, because they can support only modest payments to the labels…

“Although terms of the Universal arrangement weren’t released, Imeem executives said they believed that about half of the revenue from ads should go to those who hold rights to the music.”

Read the entire article from the Los Angeles Times online here.



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Comment

  1. You want to start a pool on when the first UMG artist sees any of that “ad revenue” on a royalty statement?

    By the way, I’ve got “never.”

    Maybe this is what John Simson had in mind when he talked about “redistribution of wealth” on the terrestrial radio side; you “redistribute” wealth from the artist to the label by calling royalty license payments “ad revenue.”

    Fred Wilhelms · Dec 10, 02:48 PM · #

  2. How do the labels square this with the artists? The major labels have had a steady parade of artists at the Congressional hearings about how artists should be paid for their work and now the labels are giving away their music?

    So, if internet radio goes by the wayside because of crazy royalty rates and sites like last.fm and Imeem take over the delivery of internet music, the artists will make nothing. And. they’ve quashed a marketing tool for the indie artists by eliminating internet radio.

    The artists get theirs yet again from the corporate bean counters, and the music lovers no longer matter.

    Wow.

    One more thing – not to mention that Imeem gets to circumvent the DMCA. I can program what song I want to play whenever I want it to play. And I thought stream ripping was a major concern of the labels… I guess not.

    Jerrod · Dec 11, 12:53 PM · #

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