Social Site Imeem Signs Deal With UMG
December 10, 2007 at 5:40 AM (PT)
In the latest development to highlight the shifting economics of the music industry, social-networking service IMEEM plans to announce TODAY a licensing agreement, allowing its users to listen free to the music of UNIVERSAL MUSIC GROUP, reports THE WALL STREET JOURNAL. IMEEM, which claims around 19 million monthly users, allows its members to embed songs and music videos on personal pages and playlists. The songs can't be downloaded or stored on computers or iPODS; for users who want to do that, IMEEM supplies links to APPLE's iTUNES store and to AMAZON.COM.
UNIVERSAL is the last of the four major label groups to strike such a deal with IMEEM, but also the largest. The new arrangement marks the first of its kind to cover all four major label groups. The IMEEM deal stands in contrast to UNIVERSAL's relationship with NEWS CORP.'s social-networking giant, MYSPACE, which UNIVERSAL sued last year for copyright infringement, claiming that site didn't do enough to keep users from posting copyrighted material for which neither they nor MYSPACE had permission. That suit is pending.
In a statement, UNIVERSAL Chairman DOUG MORRIS called IMEEM "innovative," and praised IMEEM for "ensuring that our artists are fairly compensated for the use of their works."
A person familiar with the discussions said that UNIVERSAL is to receive a guaranteed payment, equivalent to a fraction of a cent, each time a user listens to one of UNIVERSAL's songs in addition to receiving a share of advertising revenue associated with a given song, that is, ads running near where a song is accessed. Most licensing deals with services that combine free music with advertising tend to offer labels only a share of revenue.
"We're definitely not a music store, and we don't want to be a music store," says IMEEM CEO DALTON CALDWELL, adding that the deal promises to provide labels "a revenue stream they've never seen before."