Universal Music to Expand Its Online Reach
By From news reports
Universal Music Group agreed Monday to make its songs available for free to users of imeem, a social-networking service, in exchange for a share of its advertising revenue.
Universal, owned by the French media group Vivendi, is the fourth major music company to strike a deal with the Web site, following Warner Music Group, EMI Music and Sony BMG Music Entertainment, a joint venture between Sony and Bertelsmann.
Imeem, which claims more than 19 million members, allows users to create profiles and connect with each other by uploading MP3 files to create playlists, which they share.
Major record companies, including Universal, have been trying to strike a balance between curbing online piracy and forming partnerships with industry newcomers as they look for new ways to promote and distribute their music.
Doug Morris, chairman and chief executive of Universal Music, said the deal offered “an exciting musical experience for consumers, while ensuring that our artists are fairly compensated.”
Imeem is the fourth most popular multimedia entertainment site in the United States after YouTube, Google Video and MySpace Videos, according to the tracking firm Hitwise.
The site, based in Palo Alto, California, can carry full-length music and videos by Universal Music’s acts, which include Snow Patrol, Kanye West and Amy Winehouse.
Imeem was created in 2004, offering instant messaging and file- sharing software. It has since transformed itself into a social networking Web site that also streams free audio and video files next to advertisements by companies like Apple, Microsoft, Nike and AT&T.
Apple allows iTunes users to listen only to samples of songs before they purchase them for download. But imeem allows full playback of songs and videos; it hosts links to iTunes for visitors interested in buying tracks.
“It creates a new kind of music distribution model,” said James McQuivey, an analyst with Forrester Research. “It takes away the need that you might otherwise have to go get your music from iTunes or from a CD, because your music is now available for you on imeem.”
SpiralFrog, another Web site offering ad-supported music, lets users download tracks and videos for free. So far, the site does not offer songs from all the major labels.
Imeem could see competition from MySpace, which has been beefing up its online music profile, McQuivey said. MySpace recently started a music program that provides exclusive audio and video content from recording artists.
Vivendi said in November that it was exploring ways to sell digital music to make up for shrinking sales of compact discs. Universal’s sales from downloads to computers and mobile phones rose 47 percent to euro 488 million, or $716 million, in the nine months through September, representing 15 percent of its total music revenue.
Originally published by Reuters, Bloomberg.
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