Friday, March 27, 2009

Imeem squeezed

More trouble at the interface of rights holders and online services: Imeem is struggling to cope with paying royalties at the prices demanded by the people who Abba don't want us to call the intellectual property industry.

There had been rumours that Imeem was about thirty million dollars awry of its obligations, but Imeem deny that figure. It also denies that it's on the point of shutting up shop altogether:

"[TechCrunch's] $30M number is not only wrong, it's preposterous," said Graves. "We don't now owe, nor have we ever owed, that amount of money to the labels. And the shutdown rumor is equally false – we are not shutting down."
[...]
Graves said imeem is indeed hoping to renegotiate its label deals.

"I can confirm that we're negotiating with the major labels to restructure our deals," he wrote via e-mail. "This is a good thing. The economy and world have changed, and just as we've renegotiated our bandwidth bills, ad-serving deals, etc. to take into account the new economic realities, it makes sense to do the same with our content deals."

Wired suggests it could be paying as much as a cent per song streaming for some tracks - which, with Imeem serving a billion streams a month, is clearly insane.

Using our adhoc 'how much would it cost to play a song to an audience the size of Chris Moyles', I make that roughly a thousand times more expensive per listener than Radio One's royalty rate.

Doubtless, though, PRS and other rights agencies will be desperately trying to come up with a justification for overcharging a company when it does have the 'well, the parent company makes a lot' argument to deploy.


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