Insert your favorite cliche or idiom here: Imeem may have dodged a bullet. Or has risen from the ashes. They have nine lives. Or my favorite: they may have pulled a rabbit out of the deadpool.
The point is, they aren’t going to be closing down any time soon, say sources close to the company. And for a free music streaming company, that’s really saying something.
Weeks ago they were on the ropes, near the end of cash and with crushing venture debt obligations threatening to shut them down entirely. No one was interested in buying them or putting in more cash with big music label royalty commitments already past due.
Then we heard whispers that they may have a plan to build a profitable business. And apparently they’ve convinced at least their current investors to back that plan with more capital.
CNET’s Greg Sandoval reported earlier today that the company may have raised new funding (he used the “dodged a bullet” idiom, by the way). We’ve confirmed that the company has raised a new round of financing from existing investors. There’s no word if Sequoia has put new money in, and we’ve been told the amount raised is small, likely in the single digit millions. But it allows iMeem to make payroll and keep the servers running.
More importantly, the company has forged new deals with the music labels, we’ve heard, that help it break away from the crushing pay-per-stream model that’s impossible to cover with advertising.
Imeem has renegotiated its label deals to allow it to focus more on a revenue per user goal than a pay per stream. Revenues from downloads and ringtones will offset streaming rates, which moves the relationship much closer to a revenue share than a pure licensing deal. It may just give iMeem the room it needs to get to sustainability.
The company is also planning on terminating its download deals with Amazon and iTunes, we’ve heard. Downloads will be sold directly by iMeem itself through Snocap, which it acquired last year. Those download sales are very low margin, but it takes money previously being sent to Amazon or Apple and gives it directly to the labels to offset streaming costs.
At least that’s what we’re hearing. Imeem as usual won’t comment. But there’s a chance this company may still be around for the foreseeable future. And they may have redefined how streaming deals are done across the industry.
It’s my favorite music site. I don’t know what I would do without imeem…
I’m feeling happy
hmm, hope they stay alive. i gotta admit that all of these music sites seem to be having major problems with staying afloat. I just signed up for the beta of jamwee.com – looks pretty neat to me.
Congrats to the team at iMeem
Mad props – easily my favorite music site
I joined anywhere.fm, uploaded my 15 thousand tracks, then imeem bought them, poof! all my tracks were gone. (I tried their conversion process about 10 times, it didn’t work.) Oh well. I wish them luck, but I don’t have the patience for trying it again….
I think imeem is a useful site, but just as you can’t make money with webcasting you can’t make money sellling digital songs either.
There are online companies willing to sell digital tracks for at or even below costs. Apple can sharply discount because they make it up on ipods. AmazonMP3 can sharply discount because they make it up in all the other stuff you buy at their stor. Napster can now discount because they’re owned by BestBuy and want to get you to buy a subscription service.
This make it impossible for all the other companies like imeem to make money. Selling music is like selling gravel – it’s a commodity game and nobody makes any money.
I agree imeem must change or go away but adding another product line with no profits will not help them. Snocap didn’t work on myspace and won’t work on imeem. Users want free music, not paid. Labels are already complaining that nobody is buying music from myspacemusic.
– MR
Amen brother….selling gravel or water or air. It’s the 0-gain model at its finest in webcasting and online music.
If Snocap didn’t make it on myspace and myspace music can’t even make it a go, there’s nothing here left to try.
Great news. Hopefully the labels will allow for a win-win business model. If Imeem has some creativity with their revenue model, they will stay for a while. Best of luck to them !
See the problem is that the labels see imeem and myspace music as stealing potential buyers away from iTunes/Amazon/….
imeem is really stealing users away from bittorrent, people go to imeem for instant gratification, they can hear practically anything instantly. So, imeem makes finding music easier than bittorrent/p2p and in exchange shows the would be pirates some advertising, with the revenue going to the artists. It’s legitimizing music access and doing its best to make sure whatever revenue can be squeezed out goes to the copyright holders. When imeem goes away, that small amount of potential revenue is going back into a cluster of unregulated download sites.
The music advertising model is very much the future, it’s just a little too early for the labels who’re trying to keep the sale model alive long enough to retire.
Very nice! Especiallu now that also Last.fm is aking for money to listen to radio.
Good luck to the imeem team. I use the site almost every work day, and so at a personal level, I hope it succeeds.
I love imeem’s service, and the people – here’s hoping they’ll stick around for awhile.
hmmm, seems like a slow and painful recovery. Wonder how/where the leverage against the labels came in, or are the labels wising up? doubt it. On the other hand, perhaps this is overall good industry news, letting sites like Imeem breath.
edge of my seat patiently waiting
their fcked; i sell media at umakeitcool.com there is a market, but it has to be niche; the main problem is the credit card processing fees. apple gets by because they only keep $0.01 from each transaction making money from ipods.
what happens when this new batch of money runs out?
they’ve owned snocap, which sucked, for at least a year, maybe two now.
and…they are bad at business; they bought snocap cause they was all friends at napster.
truth is, they bought some time to clean up the mess before the final exit.
iMeem hasn’t revolutionized anything.
Lala is doing a much better job on the music front than iMeem ever will
I personally like FlyBy Music (www.flybymusic.com) better than Imeem. It’s still kinda new but I can sync my iPod from there with free music and don’t have to use iTunes anymore. Can’t do that on iMeem…
I’d love to see sites like imeem do well, but with the royalty rates the way they are, it doesn’t look too promising. I wonder if imeem went into negotiations with their investors and started pointing to Spotify & their crazy growth…
Good to hear. I’m a big Imeem fan.
I think the deadpool magnet will seriously crank up it’s powers for imeem when Spotify lands in the US…
All seems too little too late for these guys now.
i personally like [insert name of random music site to throw readers off] and [ibid], but what has turned me on lately is [insert name of company i work for, founded or invested in]. i think [insert vague non-value add commment about the space in general to snow readers into thinking this is a real, non-self promoting comment]
Throwing good money after bad…