With the closing of the deal with Universal Music, owned by Vivendi, the largest music company in the world, imeem is now the only place online where you can get free, unlimited music from all four major labels. You can listen to both music and music videos from the social networking site.
While RealNetworks' Rhapsody represents all the major labels, and an ad-supported model, you are limited to 25 songs a month, and must pay a subscription for unlimited use.
Spiral Frog also offers an ad-supported model, but only represents Universal and EMI. You also aren't able to play songs on the Apple iPod (AAPL) or Zune from Microsoft (MSFT).
With imeem, the downside will be users can only view or listen to music or music videos on the Internet; you aren't able to download the music. The opporuntity to buy tracks through Amazon.com (AMZN) or iTunes is offered via links on the site.
Imeem does offer the usual social networking features of enabling people to both listen to and ten share their favorite songs with others.
There's been resistance from the music industry with ad models, because they can't make as much money per song as they can with the selling of individual tracks. The alternative is of course they make nothing if people just want to listen to, rather than buy songs.
They have to stop thinking of the old model and way of doing things if they're going to survive as an industry.
What happens when you offer the ad-supported model, is more people end up interacting with the music, even though less is made from each interaction. It'll take some time to see how the model makes money for the industry. It's better than getting nothing for people listening to music free from other places.
For imeem, this gives them a head start on their larger rivals MySpace (NWS-A) and Facebook for major artists, although it wouldn't take much to have them enter the space if they choose to.
Imeem, while a lot smaller than these competitors, are growing quickly. As of October, they had 3.3 million unique monthly visitors, and also boasts 18 million active users. They are also the fastest-growing social networking site since October 2006, increasing unique visitors by 712 percent.
Dalton Caldwell, imeem CEO, has said in the past that the music industry needed to change its focus from music being the major revenue generator for the industry, and instead look at using an ad-supported model instead.
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