When I read that iLike was acquired for $20M by MySpace, I thought, "hmmm, that seems low." When I read that iMeem was acquired for $1M by MySpace, I thought, "holy shit, that's too low."
I understand the iLike acquisition. They were a Facebook app, they had no real membership of their own, if Facebook ever decided "hey, I'm a little bored with this iLike business and the way it's leeching off my membership (presses "off" key)" they could. Would there be backlash? Probably. But there hasn't been much backlash on the recent "net-neutrality" blocking for certain types of iLike auto-updates. When iLike figured, "we'd better do something with this before the window runs out and our investors get pissed, and we'll have no exit, no jobs, no realization of our blood, sweat, and tears", they quickly sold to rival MySpace after talks wtih Facebook yielded nothing. Facebook doesn't need iLike. But due to it's footprint in the largest most successful closed social network in the world, MySpace does. So the founding brothers made a couple sheckles, got MySpace jobs, and the investors didn't lose any money. But I digress.
iMeem is a completely other story. Unlike iLike, this was not a simple "app". This was a full blown, MySpace derivative social networked site focused on media and playlisting. It's robust, it's several pages deep, and it's expensive to maintain and upgrade (trust me, I KNOW). Originally, I liked the concept. MySpace was clunky, and could let me have a "radio on demand" experience. It didn't allow me to discover new music via the community. It didn't let me create my own playlists and bookmark playlists of others I liked and respected. iMeem did all that. What it didn't do, is have a workable revenue model.
So while the general public enjoyed all the free streaming music and playlisting manipulation, iMeem bled money from the day it was born. Investors plugged in $25M into it over it's lifespan.
Why did it die? I am surmising this is inadvertently part of a major label powerplay. It's nothing against iMeem in particular, but rather against anyone looking to make money off their glorious catalogue, particularly in a potentially lucrative new media way. "If we don't own the revenue stream, we'll just make it very expensive for you. Good luck and where's my check?" Originally, in the early days of the wild west of music online iMeem just let people post music at will, but eventually copyright law dictated this was not legal. So iMeem went to expensive task of doing deals with all the music publishers and copyright holders. Those they couldn't get, the songs mysteriously turned into near useless 0:30 second samples (so useless in fact, they installed a "skip 0:30" button for people who wanted those samples automatically skipped in their playlist") But these deals were expensive. One strategy was to seek funding from Warner Music, thereby potentially lessening the cost and increasing the cooperation of at least one major. At the end of the day, $25M was flushed down the 2.oilet.
Label/network owned projects like VEVO (and major partner projects like MySpace Music) will not face this threat. While $25M is nothing to sneeze at, it is a drop in the bucket compared to the budgets of these giants.
Let me make this abudantly clear, and I have learned this first hand as well... Ad supported music models (including integrated ad campaigns) as the exclusive revenue stream DO NOT WORK. First of all, the ad revenues are too low, and face competition from CPM threatening giants like Google and Facebook. Second of all the streaming music is too expensive, even when you have one major label as a partner.
Sobering reality for anyone looking to create a music discovery and sharing platform on the web where fans actually get to listen to music.
