Universal Music Group has struck a content pact with music-based social networking site Imeem Inc. to provide free, ad-supported on-demand streaming of its music and videos.
The deal, forged on Friday and announced today, sees Imeem sign-up the “full-house” of majors; the Web firm says it becomes the first social networking business to offer full-length, streaming access to the entire music and video catalogs from all four majors, based on an ad-sharing revenue model.
A glance at the Imeem Web site this morning reveals the service is already hosting UMG content, including works from multiple-Grammy nominated stars Kanye West and Amy Winehouse.
The Imeem deal is the latest signal that UMG is flexing its powerful market-share in the digital space and, some note, setting the pace in negotiating a healthy return on licensing its works across new business models.
A source close to the new deal says UMG stands to receive “a fraction of a cent per stream.” And the music giant is understood to have secured a “minimum per play” deal, something the other majors did not pull off, according to well-placed contacts.
In talks on Microsoft’s Zune device, UMG’s team recently negotiated terms where the software giant delivered a revenue stream on each device sold.
But an Imeem spokesman says of the new deal, “It’s incorrect to state that UMG is getting a per-stream deal. It’s an ad-share deal with a single line of revenue directed to UMG.”
In a statement, Doug Morris, UMG’s chairman and chief executive commented, “Imeem has developed an innovative way to make our artists’ music a central part of the social networking experience.
“More importantly,” he added, “they’ve done so the right way – by working with UMG to provide an exciting musical experience for consumers, while ensuring that our artists are fairly compensated for the use of their works.”
Imeem, which boasts more than 19 million users, allows visitors to stream full songs and videos from labels with which it has agreements, free to the user, in return for a cut of the advertising revenue it receives.
In the joint statement, Imeem founder and CEO Dalton Caldwell described the licensing pact as “a significant step forward for Imeem and a defining moment for social networking and ad-supported music.”
Imeem scored its first major label deal with Warner Music Group this July, following the label’s threat to sue the company for copyright infringement. It since added a content filtering technology and ad revenue tracking system. A deal with Sony BMG came in September, while EMI followed-suit in October.
