Independent artists who sold their music through imeem’s Snocap music storefronts on MySpace and other sites won’t be paid what’s owed even after MySpace Music’s acquisition of some – but not all – of Imeem, Wired.com has learned.
MySpace Music bought “certain assets” from imeem, and they do not include imeem’s liability to more than 110,000 independent artists with Snocap storefronts, according to a source with inside knowledge of the deal. Those artists’ contracts mandate they be paid each month if they’re owed more than $20. Some artists have been owed money for more than a year, and the chance of them seeing any money now is, for all intents and purposes, zero, the source says.
Artists attempting to get paid for songs sold through Snocap stores – many or most of which were on MySpace itself – must get in line with imeem’s bank and other creditors. MySpace Music paid less than $1 million for imeem, so it’s doubtful much will remain for the artists.
“MySpace Music bought a limited set of imeem’s assets including the domain name and certain technology and trademarks,” a MySpace spokeswoman said in an e-mail to Wired.com. “The asset sale to MySpace Music was part of a foreclosure process which resulted from the lien certain secured creditors had on all the assets of imeem. MySpace Music did not acquire imeem’s outstanding debts, including the money imeem owed to artists under the Snocap relationship. Upon closing, users trying to access the Imeem website were redirected to MySpace Music. We did not acquire imeem’s contracts or relationships as we have our own in place. MySpace Music has its own distribution platform, which includes relationships with prominent aggregators and indie labels, that provides indie artists ways to monetize their music on our site.”
One source with inside knowledge of the deal said MySpace Music’s rushed purchase of imeem’s assets forced it to “leave behind anything that either had explicit liability or potential liability,” including Snocap and its debts to thousands of independent artists and bands.
Napster creator Shawn Fanning co-founded Snocap in 2002 to let artists sell their music through an embeddable storefront widget. At one point, the service was marketed as the exclusive way for artists to sell music on MySpace. Imeem bought Snowcap last summer. But because MySpace left most aspects of Snocap out of its acquisition of imeem’s assets, all 110,000 or so of those storefronts are gone. The server that hosts them is offline and so is the Snocap website.
Possibly the last band to be paid by imeem for music sold through a Snocap store embedded on MySpace was Javelin, which happens to be my brother’s and cousin’s band. After they inquired about money listed as owed in its online account, imeem sent them a check for about $400 for approximately a year and a half of sales.
That may not be “a princely sum,” as Tim Quirk put it. But for growing bands – many of whose income trickles in from a variety of sources – it matters, especially when you consider that imeem’s payments to major labels helped drive it out of business in the first place.
There’s nothing technically wrong with MySpace Music only acquiring certain assets from imeem, and teams of lawyers scrutinized the deal before it was done. Regardless, in this latest round of digital musical chairs, independent artists who set up music stores in good faith have been left holding the bag.