What’s Imeem founder Dalton Caldwell been up to since MySpace acquired the company he started for $1 million last year, and then subsequently shuttered? Well, most recently he discussed his reflections on the Imeem experience to a group of students and entrepreneurs at the YCombinator Startup School at Stanford University. The upshot: launching a music-based startup is a bad bet.
According to an account of the speech in Mashable, Caldwell said ad supported music businesses have to pay quarterly minimums and advances to record labels, along with per-play minimums, that are almost impossible to maintain. He said labels feel such services devalue music, hence the onerous terms.
As for subscription services, he said such services have to “give up 10% to 30% of your company” as well as pay quarterly minimums. And he particularly railed against the fact that the deals startups strike with labels are non-transferable, meaning that if they are acquired, the deals need to be renegotiated, which he said destroys the value of the startup.
Mashable reports that Caldwell called for Congress to expand statutory licensing frameworks as one solution. He also urged artists to abandon the major label system and strike deals directly with music services.
