imeem executives walk away with golden handshakes whilst leaving artists high and dry

Posted by | Dec. 30, 2009 | 5,656 views

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.

Related Posts:

Morality in the Digital Age

When Commerce Eliminated Art… (The Story of The Music Industry)

Killing In The Name…Is This The Downward Spiral of “Monopolostic Pop”?

TMV Looks back On Our Predictions to See Where We Were Right and Where We Got It Wrong

BRITs in Pieces: The Reanimation of the UK’s Premier Music Gong Show

Radiohead’s Latest Asking Price Learns From Its Last Digital Experiment

An Open Letter to Neil Portnow, NARAS and the Grammy Awards and some guy named Steve Stoute

Why The Whole Music World Should Not Go Digital

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Posted by on Dec 30 2009. Filed under featured, Wide Angle. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

4 Comments for “imeem executives walk away with golden handshakes whilst leaving artists high and dry”

  1. Rumor mill

    Hahaha I wish the claim that imeem execs were given golden handshakes were true. We got no such thing. A few of us were held on as contractors for two months, but that was it. If you want to blame anyone for this tragedy, blame The Orchard for their frivolous lawsuit. They could have easily claimed their content just like every label did. Imeem didn’t have the cash to fight it, and couldn’t raise more funds because of the lingering suit. They’ll never get a penny, just the satsfaction that they ruined a great company.

  2. Ike Blackliquid Ngwaba

    Once again we are faced with the sad fact that greedy idiots were allowed to be placed in a position of responsibilty. Lessons from the last 20 years in our industry have not been learned.
    This should be a awake up call to all artists. The job needs to be done properly. We should have strong and direct relationships with reputable digital download stores that are selling our music. We should be working in teams with regards to cross promotion of material. We should not pass off a job to people we don’t know when we can do it ourselves. Imeem should be held accountable and possibly a class-action lawsuit should be made against them.
    Stop messing about and be accountable for what we want and how we want things done.
    To all artists, please remember that without us making the content there is no job for those that want to sell it in their stores.
    We are still rather lazy when it comes to closing down sites illegally giving away our music. There are still major problems that we need to fix conecrning download sites giving equal support to artists that they are making money from.
    We need to act now and learn from this latest digital domain fiasco.

  3. Denis Knowles

    Intellectual copyright ought to come under the protection of the Patent Office rather than leaving in the hands of the music industry. That a record company can wheel and deal artists rights away is not in the best interest of the industry as a whole.

    The music industry has always attracted prowlers way back before copyright laws came into being in the 18th Century and will continue to do so. Handel, being a shrewd businessman as well as a great composer set up his own publishing company rather than allowing himself to be ripped off by John Walsh, the largest publisher of his day. Even then his music was stolen for the Beggars Opera. Schubert was heavily ripped off by his publishers and so on.

    In my 34 years experience in the record industry the BPI’s efeectiveness varied depending upon the ruling executives, between super egos and luke warm altruism.

    We have great inventors such as James Dyson, whose products are protected by world patents. British artists, rock in particular, have contributed to the UK music industry and has always been a major export asset adding to the balance of payments. Their work should not be left in the hands of major record companies or publishers who might put self interest before anything else.

    The industry is to blame for the Internet problems due to its own past incompetence and ignorance. In July 1987 I had lunch with John Deacon, the Director General of the BPI. I urged him to allow me to act as a go-between between the BPI and mushrooming computer hardware and software companies as I envisaged a time in the not-too distant future the possibility of electronic transmission of music, now known as downloading. The premise was that we could benefit from a learning curve that allowed encoding thus not only protecting our product but promoting it in a revolutionary way. John was interested but when he put it to the BPI – his masters – there were no takers, more out of ignorance I suspect than commercial judgement.

  4. Peter Jenner

    Good one Jakomi. This is right to the heart of the question, namely fairness. It is not fair for the innovating company (and shareholders sometimes) and the labels who get up front money for something or another, and then the artists (and the publishers and writers?) end up with nothing. The labels do not have to be greedy, they could be fair but if there is a choice between the bosses bonuses and the artists guess who wins ? This is why artists are lukewarm in their support of the BPI and IFPI, and Mandelson.

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