Does Twitter Work As a Music Discovery Engine, Too?

twtfmTwitter is a remarkably flexible application -– an efficient news service, a way to keep up with friends, a replacement for RSS feeds, a resource for links worth sharing, a broadcast medium and two-way method of social interaction (if not quite a social network). But I’m not sold on Twitter as a music discovery engine, despite a recent proliferation of ways to push music into a Twitter feed. Simply put, Twitter and music discovery happen at two different speeds, and music discovery works better elsewhere. Read More about Does Twitter Work As a Music Discovery Engine, Too?

Imeem’s Recap Round Doesn’t Include Sequoia

imeem_logoImeem lost a key backer when the social music site raised its last round of financing this spring: Sequoia Capital. The stalwart VC firm, which invested in Imeem’s Series A round and followed on at least one other time, has apparently lost confidence in the startup’s ability to reap profits from free ad-supported music streams, and was largely washed out in the recapitalization round. Existing shareholders Morgenthaler Ventures and Warner Music Group (s WMG) provided money in the round, worth about $6 million, which first came to light in May. Read More about Imeem’s Recap Round Doesn’t Include Sequoia

Time for Digital Music to Get a Reality Check

It’s been a busy September for the digital music business. Steve Jobs reappeared onstage to introduce the iTunes LP format and a series of new iPods. Anticipation grew around European streaming music service Spotify, which is due to arrive on U.S. shores in the coming months. And a series of mobile music applications that compete indirectly with the iPod were approved by the very company that makes the device. So it seems like a good time to assess the chances these key music models that have received so much attention and investment have of surviving. Read More about Time for Digital Music to Get a Reality Check

Is Warner Music Killing Music Startups?

[qi:005] Earlier today, news emerged that Warner Music Group had taken a $33 million writedown on its investments in startups Lala ($20 million) and Imeem ($15 million). What that means is that Warner music is giving up on these ad-supported digital music startups and moving on. This comes as no surprise to us: Rags Gupta had pointed out in a post for us that music startups are destined to fail because the labels are gouging them silly. At a royalty rate that is $10 per 1,000 plays, there is little chance any of these startups making money. As Rags pointed out, “While Imeem has licenses from several labels it’s been reported that it gave up a significant piece of the company and agreed to onerous terms, so, needless to say, it likely isn’t profitable on its licensed music, either.”

Imeem is in deep trouble. The company raised an emergency round of money from its existing investors so it can keep the servers running and cut salary checks. Apparently labels are also dissatisfied with MySpace Music and the money it’s generating. Again, not such a surprise for our readers. As startups such as Imeem stare down the abyss, it’s the record labels that will ultimately pay the price. Today’s music consumers have come to expect services such as Imeem as a way to discover music. By asphyxiating these discovery engines, record labels are running the risk of annoying consumers and forcing them to look elsewhere. At least this time around the music industry can’t blame their customers for their problems — they are, after all, the gang that can’t find its way out of a paper bag.