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Sources just love spilling on the distressed Imeem, a company actively restructuring its licensing obligations to stay afloat. Just weeks after completely writing off its investment in the company, Warner Music Group is now overhauling its equity deal. According to details shared by the Wall Street Journal on Monday, the label has agreed to take a larger percentage in the company in exchange for smaller monthly licensing fees. That coincides with information circulating last month that both Warner Music Group and Universal Music Group had lowered their licensing fees, a move that eases Imeem's overhead - and keeps the lights on.
But just how long can this story continue? In the not-so-distant past, the majors would have probably let Imeem crash-and-burn, while re-starting the process on the next flawed business model. But a leaner Sand Hill is smartening up on music plays, and that is cutting the cash pipeline to major labels. It is also disrupting a game that frequently featured lawsuits, onerous licensing terms, and eventual flame-outs.
Warner watched its investment in Imeem go kaput, though the label is now brokering equity with content instead of cash. Still, other investors are pumping cash in the company, a questionable decision given broader monetization problems and macroeconomic issues. Just recently, Imeem scored a $2.4 million round, according to an SEC filing. In early May, sources also pointed to a low-millions injection.
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