Are The Major Labels Killing Imeem?
Late last year, rumors began circulating that imeem was in trouble. Ad revenue simply wasn't meeting the projections needed to pay labels the per stream rates agreed to. It was said that imeem was burning through the cash that Sequoia and Warner Music had given them at a rapid rate. Then the company began openly searching for a buyer. Along the way, the global economic meltdown hit, further slowing both the flow of online ad dollars and capital investments.
Now comes word from a variety of sources that imeem is in real trouble. Not the $30 million behind in payments to labels that one source told TechCrunch, but enough trouble that the future of the service that delivers in excess of 1 billion song plays each month is in serious doubt. In addition to dwindling cash reserves, a tough ad market and with few investors in sight, imeem faces both a major label community that appears unwilling to re-negotiate terms and the potential of competition from Spotify, Project Playlist and others.
"in a desperate search for new revenue"
The major labels and other rights holders are in a desperate search for new revenue sources and have focused in recent months on wringing bigger payments out of ad-supported music services from YouTube on down. In doing so, they run the risk of destroying the sources of music discovery that are most popular with consumers and run driving fan behavior further underground to platforms that may never be monetized.
"the labels need to act like partners"
For now, the labels seem content with constantly shifting their support from new service to new service in search of a better mousetrap – or perhaps a new advance payment. Spotify might even me that better mouse trap. But sooner or later the labels need to act like partners interested in win-wn relationships rather than command and control. – Bruce Houghton
Bruce, I could not agree with you more!
I equate the current state of the record (well, music) industry to the Great Depression. President Roosevelt’s New Deal mantra was “Let’s try everything and if it doesn’t work, we’ll try something else.” But that wouldn’t mean the constant shuffling around of services they support the labels do is the correct interpretation. Roosevelt allowed ideas to develop over time and if didn’t work – next.
They need to try everything – anyone that comes in with a reasonable idea – license their content to them (we need to develop a reasonable statutory license) and let them develop over time. If they are not paying the bills, but have a lot of users, as they have your potential audience’s attention, like imeem, then figure out a way to help them along for a while rather than kill them off to throw support to spotify and project playlist.
Imeem should be broken up into different(smaller) markets – to try and make this simple look at locally ran tv commericals that are only played in a smaller market area – say a local business or mayor wants to run adds in their district – I think Imeem advertising should step it down to that level. Look at myspace how they offer advertising at a very low cost where you can target you audience. Say I have a concert I am hosting in Indianapolis, IN and I can target that market for the event I want to promote and pay a very low fee only when that advertisement is clicked on – and you can set a limit to the amount of money you want to spend.
Something offered like that with Imeem would bring in a lot more ads at a lower price but just think how they can turn a platform like this around on a larger scale and bring in money. A lot more indie record labels would use imeem if they can target smaller markets for lower costs – same with concert promoters, festivals, and other companies.
Say each state is a market (50) and then they keep their national and international markets the same. So with their 50 markets now they can run ads $100.00 a week / $175 two weeks / $350 a month + on up
So they start out small and bring in 5 ads a month in each market bringing in $350 per ad x 5 x 50 = that’s $87,500 a month x 12 = $1,050,000 a year – of course they would not use these numbers and they would have to increase these numbers to even make a dent in what they want but you get the picture.
this was a hate-filled illogical rant….do you consider being owed $30 million “monetizing?” ….YouTube’s ‘music discovery’ doesn’t equate into monetization either, as many popular youtube videos’ songs never make any chart….the message you send is that if the labels aren’t giving their product away, then they’re stupid and greedy
To notaproblem23:
I think any deal that puts music services that facilite music discovery for millions as YouTube, imeem, Pandora and others do, is bad for the music business particularly at a time when it is struggling.