Vivendi's (OTCPK:VIVEF) Universal Music Group has reached an agreement with Imeem.com to offer free streaming of its catalog of music and videos through Imeem's popular (19M monthly users) media-focused social networking site. Universal is the last of the four major music labels to agree to such a deal with Imeem. However, Universal has a pending copyright infringement lawsuit against News Corp.'s MySpace related to its users' posting of copyrighted materials without permission. The difference appears to be Imeem's "ensuring that [our] artists are fairly compensated for the use of their works," according to a statement by Universal Chairman Doug Morris.
The Wall Street Journal cites a source who said the Universal-Imeem deal has a guaranteed payment feature for Universal worth a fraction of a cent per song, in addition to revenue sharing from web advertising. Universal's E.V.P. Rio D. Caraeff said the deal is the company's largest deal to-date. "We're embracing the ad-supported business model. These are our crown jewels: on-demand, full-length tracks." Imeem's CEO said the company is "definitely not a music store," although it does link out to Apple's iTunes and Amazon, and said the deal provides labels "a revenue stream they've never seen before." Ordinary shares of Vivendi were last up 0.6% to €32.12 in Paris.
Additional Reading: Universal's Free Music: A Good Idea • For Media Companies, Consolidation Is a Matter of Survival
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