Monday, June 15, 2009
Exclusive: Warner Music Group Gets Back Together–Very Cautiously–With Imeem
Just a few weeks after a very public breakup, Warner Music Group and Imeem are getting back together again. Warner, which told investors last month that it had written off the $16 million it had invested in the Web music start-up, plus another $4 million in debt, has made a new deal with the company and will get another slug of equity. The big difference–this time, Warner isn’t cutting Imeem a check.
A licensing dispute means Warner Music Group can’t promote a new album by one of its biggest acts on the world’s biggest video site. But you can still find Green Day videos on the site, if you know where to look. What gives?
Turns out not everyone is convinced that big music is dying: Investors have snapped up $1.1 billion in debt issued by Warner Music Group–double the amount the company had originally planned on issuing when it announced the offering yesterday morning. The fine print gives the label some flexibility in case of a “major music transaction”–say, perhaps, a deal to merge with EMI.
In the old days, back at the beginning of this decade, news that a band’s new album had leaked on the Internet before it went on sale was a big deal. And it occasioned lots of wailing and hair-pulling in the music business. But that was when people bought CDs. Now it’s a way to raise money for charity.
Last year, Warner Music Group boasted about its investments in two digital music start-ups. Today the label says those dollars were wasted. Bummer for imeem, which is trying to raise more money.
The newest special-edition iPod to hit the market comes from Prince. It is purple, it is produced in a limited batch of 950, and it will cost you $2,100. But at least it contains every Prince song ever recorded, right? Nope. From what I can tell, the only thing the gadget comes preloaded with is a 15-song, 40-minute concert video.
The world’s largest video site and the world’s biggest music company are joining up. Google’s YouTube and Vivendi’s Universal Music Group will be launching a new site, dubbed VEVO, which will highlight UMG’s videos. This is essentially what I’ve been calling “YouTube Music,” and it’s been in the works since last fall; in March I reported that the two sides had basically hammered out a deal. It’s a pretty big deal for YouTube, the music business, and the rest of the media world. 
Yesterday I noted that Apple and the big music labels had effectively raised prices at iTunes via a tiered system that priced most songs at 99 cents and many at $1.29. The question: Where are the cheap songs–the ones that the labels had promised to start selling for 69 cents? They’re coming, music label execs tell me. Just hold your horses.
Apple has finally rolled out the “flexible pricing” plan it announced earlier this year at its music store. If you’re a casual music consumer, and that phrase doesn’t mean anything to you, let me rephrase it: Many of your favorite songs will now cost 30 percent more at iTunes.
No one wants to pay for music on the Internet. But starting a free music service on the Web takes a whole lot of cash. Just ask the folks at Seeqpod, which filed for Chapter 11 bankruptcy protection last week. The company’s biggest expense: Lawyers to help it fend off copyright lawsuits from the big music labels.
Call me a crusty skeptic, but I think it’d be hard for entertainers to get Washington to help them out in the best of times. So my gut is that there’s little chance that Congress will pass something called “The Performance Rights Act,” which would force radio stations to pay musicians–or at least, music labels–whenever they play one of their recordings.
YouTube lets you repost its clips anywhere you want–unless you’re talking about big music’s videos, which remain trapped on the site. That makes no sense, and the labels know it–or at least some of their employees do. 
