MySpace Music Resurrects Imeem Playlists
Last month, MySpace finally completed its deal to acquire troubled music startup Imeem. Unfortunately for imeem fans, the bank shut the service down as soon as the deal was completed, redirecting them to a MySpace Music splash screen.
Context & Ripple Effects
Imeem's path to this point was a fast fade: the startup had licensed all four majors by late 2007 starting with its deal with Universal Music, then scraped together $6 million in fresh funding in September 2009 to stay afloat. That was not enough — when MySpace completed the acquisition in December 2009, the bank shut the service down immediately, redirecting users to a MySpace Music splash screen.
What changed with this resurrection is the treatment of what MySpace bought: unlike iLike, which MySpace had left largely intact after its August acquisition, Imeem was killed outright and only its assets salvaged. Bringing user playlists into MySpace Music turns the defunct service's community into migration traffic for a property that has been fighting declining social-network ad spend since mid-2009.
First-order effects
- Former Imeem users get their playlists back inside MySpace Music rather than losing them entirely, converting a shutdown into an acquisition funnel at zero additional licensing cost since Imeem's major-label deals already covered the catalog.
- MySpace Music gains the one asset Imeem still owned outright — its user-generated playlist data and audience — after paying for a distressed company whose service never operated under its ownership.
Second-order effects
- Rival playlist-driven services face the same choice Imeem's other suitors did: buy stranded communities cheaply or watch them be absorbed by MySpace Music, which now holds both iLike's intact service and Imeem's imported playlists.
- News Corp's rumored interest in movie social network Flixster suggests a repeatable playbook — acquire a struggling social property, fold its audience into MySpace's vertical properties, and monetize the combined ad inventory.
Third-order effects
- If distressed music startups keep exiting via asset sales rather than independent survival, consolidation around platforms that hold label licenses becomes the structural endpoint, with playlist data treated as the transferable asset worth buying even when the service itself is worthless.
- For labels, each such collapse narrows the field of independent licensees, concentrating negotiating leverage further among the few surviving platform buyers.
The trend: Music startups with licensed catalogs are increasingly exiting through distress sales to large platforms, where the user base and playlist data survive while the brand does not.