imeem + Warner
I’ve been pretty skeptical of the potential for a free, ad-supported model for on-demand streaming.
There’s a lot of folks doing it these days — from Project Playlist and The Hype Machine (that link to existing files on the internet) to imeem and lala (that host content on their own servers). Of course, Rhapsody and its imitators (Napster, Yahoo Music Unlimited) have been offering subscription-based on-demand streaming for many years, but that’s never really opened up to a mainstream audience. Meanwhile, the free on-demand services have heretofore been unlicensed.
However, imeem announced last month its deal with SNOCAP for an ad-supported, on-demand service that includes a number of independent labels. But I didn’t think the majors would license content for on-demand access on economical terms (e.g. sharing revenues). Further, Warner sued imeem last month for copyright infringement which, in retrospect, looks to have been a negotiating tactic (from Staci Kramer on paidContent.org):
This may be one of the fastest lawsuits/negotiations in the copyright fight era … Warner Music Group filed suit against social-net imeem last May, contending the company was infringing on its copyrights by letting users build and share online playlists. In June, without any of the majors on board, imeem launched an ad-supported service trading access for copyright-and making it possible for music rights holders to opt out. Now, the WSJ reports, WMG has dropped its suit in favor of the rev share deal, providing access to its entire catalog.
The Journal sees it as part of a trend where music companies work with new media instead of responding in knee-jerk fashion. It would be more convincing without federal court as a way station but, yes, Warner and others have been more willing to switch than fight having decided its better to bring in revenue, even the marginal kind, rather spend more on court costs. That doesn’t mean an end to copyright suits like this but it make them more of the exception than the rule.
I’m not sure whether this pattern is a good thing, or what this holds for the media industry, but it’s an increasingly familiar one for internet startups: (1) create service and tap copyrighted material sans license, (2) use that content to build a business faster than would otherwise be possible, (3) use size to help gain some degree of bargaining power when negotiating with labels. MySpace, YouTube, and now imeem. I realize a fair amount has been written by others on this point but it appears to be happening again.
On one hand, it is good to see that labels are looking to do deals rather than *just* litigate, as with Napster back in the day. On the other hand, this trend undoubtedly will (or rather is) encouraging copyright infringement by bold startups.
Nevertheless, the imeem crew is to be commended for getting a deal done with one of the Major labels. While coverage references a share of advertising revenues being paid to Warner, it would be insightful to understand the other undisclosed details of the deal: term and renewal option, any per-stream or per-period minimums, and potential equity (as in the YouTube deal).
Perhaps it’ll soon be cheaper to offer streaming on-demand rather than under the compulsory license for webcasting!
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