Live music: Imeem gets better licensing deal from Warner

Music startups have had trouble making money, partly because of high licensing fees they pay to record labels. But Imeem, a popular streaming music service had so many fees to pay that it was having trouble staying in business. Now, though, past investor Warner Music Group has worked out a new licensing deal with the startup, according to MediaMemo.

A source close to Imeem has confirmed the story, and adds that its advertising sales team is “crushing it,” with revenues up quarter over quarter and year over year.

Terms of the new deal aren’t being disclosed. But MediaMemo says it is intended to help Imeem generally pay Warner for using its music library (surprise!) and, specifically, to ease cash-flow problems by reducing the fee amount that Imeem has to pay Warner every quarter. Presumably the new fee will be lower than the one-cent-per-song-played deal that record labels have been rumored to demand from companies that stream the songs they own.

Warner recently wrote off $20 million on Imeem in the form of equity investment and debt. Meanwhile, Imeem has recently finished raising $6.5 million, according to my source, and is out looking for more.

[Bloc Party photo via Imeem.]

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