imeem executives walk away with golden handshakes whilst leaving artists high and dry
The recent closure of US ad-funded streaming service imeem has left some very uncomfortable questions for the industry. Namely is it right that executive’s from a service, which sucked up in excess of over $37 million dollars of investment since its establishment in 2003, walk away with golden handshakes whilst leaving the artists that supported its service high and dry? Parallels with the public outcry against the banks paying bonuses for failure are very apt.
According to VentureBeat the acquisition valuation is closer to “$7 – $9 million. That’s $1 million in cash, plus earn-outs to retain key employees”. TMV would like to see the earn-out conditions for all executives at all failed (in the last decade) and still in business digital music businesses. As far as TMV is concerned, everything should be transparent for all artist sadly caught up in these fiascoes’, both in the previous and current history of recorded and published music in the last 20 years.
As an industry we really do need to ask ourselves whether we condone this type of situation in our own industry? TMV certainly do not. Whilst Myspace’s (and associated Major labels,and only just recently indie label bargaining machine Merlin) has been receiving lots of flack for purchasing imeem), they are actually the good guys this time round. According to TechCrunch “MySpace didn’t shut the Imeem service down. Imeem’s creditors and the music labels did. If MySpace hadn’t done the deal Imeem would have shut down anyway”.
This also opens an unwelcome (but more then overdue) debate, in terms of what artist royalty payouts are in comparison to what these key label powerhouses, earn in terms of the advances they get paid by all of these new entrepreneurial, business ventures which end up failing and/or succeeding. What does need to be considered is do the labels actually “cash-in” on licensing their catalogues without actually, paying through these “earn outs”, both on the label and publishing side. Are these labels actually legally able to term this revenue stream as”black box income”? There is the real question… If so all current artist publishing and recording contracts do require serious re-examination in TMVs view!
TMV do suggest that whether you are signed or not that you check these facts, before you enable these conglomerates to manage or own you copyrights. Perhaps the lesson in all of this is to secure a legal representative that knows their way around this legal, loophole?
Without the Myspace rescue package the 16 million imeem users would have also been left high and dry. Whilst the transition was not perfect, and could have done with more communication from Myspace to imeem users, it did serve its purpose.
TMVs problem is not with Myspace, but several ex-senior imeem executives who reportedly walked away with $9 million between them after the fire-sale to Myspace. Why should executives walk away with golden handshakes and leave the artist using the snocap widget (imeem purchased snocap in 2008) without any money. If you were to look at the aggregate this would amount to a reasonably high sum in the millions of dollars realm…
Reinforcing this is the fact that on December 17th US district court judge Denny Chin fined iMeem $1.77 million US dollars for its failure to turn up in court to face a copyright infringement suit launched by The Orchard. Apparently the suit was launched on October 21st as The Orchard had only granted iMeem the rights to distribute samples not full tracks on the site.
So not only has iMeem left artist high and dry, it was also knowingly allowing copyright infringement on the worlds largest independent digital distributor of music content. In TMVs view this should lead to the executives concerned facing goal terms. Now that would be setting the right example if the IFPI’s continued action against the Pirate Bay is anything to go by.
Whether we like it or not it is a FACT that many people promote their morally reprehensible advocacy of piracy and illegal file-sharing because the artists always get screwed by the corporate system. Situations as outlined above only serve to fuel this mis-directed justification of piracy. The fact is WMG lost a hell of a lot of its own cash investment wise as have other labels who will now not be paid along with the artist who’s music was used by iMeem.