Robertson Pans Imeem, Universal “Death Sentence”

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Imeem recently sealed a deal with major Universal Music Group, a revenue-sharing arrangement lauded as a fresh model for the recording industry.

The negotiation was the last and final major label arrangement for social networking upstart Imeem, and part of a broader revenue diversification move by companies like Universal.

But not everyone is so upbeat on the arrangement.  Michael Robertson, original founder of MP3.com and a notorious industry cage-rattler, heaped criticism on the tie-up during a Wednesday blog.  “Far from a breakthrough, it is a death sentence for Imeem,” Robertson wrote, citing discussions with individuals close to the negotiations.  “Under a dark cloud of looming lawsuits, Imeem entered into a crushing financial agreement that allows them to survive as long as venture capital money continues to flow into the company, but spells almost certain financial calamity once outside funding halts.”

Robertson was quick to criticize an aspect of the arrangement that calls for a per-penny payment on streams, if advertising revenue fails to meet certain thresholds.  In addition, Robertson pointed to a $20 million upfront payment, and similar demands by other majors.  “A more accurate description would be an ownership position with substantial upfront payments, plus required ongoing payments regardless of revenue generated by Imeem,” Robertson relayed.  “To put it another way, it is the same onerous deal labels have foisted on digital music companies for the last decade.”