Correction: Universal Music in Streaming Deal With Imeem; Will Earn Revenue On Either Ads Or Plays

Correction: The Wall Street Journal has issued a correction on this story and we are as well. The original WSJ article referenced below did not specify the payment structure, leaving the impression that Universal Music Group’s revenue share would come from both advertising and streams. Imeem explains that the deal provides for stream payments only if the advertising revenue falls short of the contractual amount.

Original post (Dec. 9, 2007): Universal Music Group has signed a deal with social networking service Imeem, making it the fourth and largest to offer free streaming of music and videos. The songs can’t be downloaded or stored.

According to WSJ, Universal will receive a guaranteed payment, equivalent to a fraction of a cent for each stream of its artist, in addition to receiving a share of ad revenue associated with a given song (the Imeem service allows users to embed songs and music videos on personal pages and playlists). Most licensing deals with services that combine free music with ads tend to offer labels only a share of revenue. So like usual, UMG’s love for double-dipping continues. Some more info in the release.

SAI: Even without UMG’s music, CEO Dalton Caldwell says the company has been able to sell more than $1 million worth of ads in Q4. He says the company has been able to command $20 to $30 CPMs for music video ads, $8 to $12 CPMs for audio-only ads, and CPMs in “the teens” for traditional banner ads.

UMG recently instituted a streaming policy such that each song for its artists will be limited to either 90-second clips or full-songs that contain promotional voice-over messages. The policy applies to MySpace (which UMG is suing for violation of copyright law) and others.

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