Imeem, Snocap, MySpace to leave musicians holding the bag

[theblue1]

People wonder why I'm so cynical about the music biz...

From Wired

Originally Posted by Wired

MySpace/Imeem Deal Leaves Thousands of Artists Unpaid

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.

Despite the fact that MySpace has always been heavily involved in promoting Snocap and pushed them as the only way to sell music through MySpace.

When it looked like Imeem and Snocap were circling the drain, MySpace rushed to buy what few assets their fairy godchild had left -- apparently intent on making sure that the bankruptcy courts would have little chance to convert those assets into payment for some of the bundle owed musicians for MySpace related sales.

Nice, huh?

[ryst]

Can musicians file a lawsuit against them?

[ignatius]

that blows. i took my snocap stores out of my myspace pages a while ago. they were "unavailable" anyways because i went through IODA for digital distribution a long time ago and IODA sent out a rights holder update a while back stating they were having a contract issue w/snocap/myspace and until then they would not have content available to snocap.

i'm sure they owe me a few $$ but i don't expect to see any of it. what a scam.

all the more reason to invest in your own site w/your own web store or make a 1 to 1 deal w/one or two online shops and link to them from all your other promo/networking pages.

this does sound ripe for a class action lawsuit though.

[theblue1]

As my grannie used to say:

You can't get blood out of a turnip.

MySpace got in and bought up assets before they could be redistributed through a bankruptcy court. The money will conveniently evaporate before they file. One suspects.

Guess who loses again?


Well... not me, this time -- anything MySpace pushed so hard just felt funny. That whole Ruper Murdoch/Fox thing. And then Snocap, itself, was started by Shawn Fanning -- and I thought he demonstrated the level of his regard for musicians by creating the original Napster, very clearly designing it in such a way as to facilitate piracy, and then claiming it wasn't his fault if people "misused" it.

But a lot of other folks bought into Snocap, particularly with MySpace pushing it so hard. Once again, someone else screws the pooch and musicians somehow end up getting it in the shorts. So to speak. Not to mix metaphors.

[brightbyrd]

Class Action Lawsuit.

You can't just buy a company but not buy their debt obligations. They are counting on the fact that musicians will never pull it together....scumbags.

A lot of the startup companies that promise to deliver for musicians are just big money making scheme for their owners. They draw in investors who pour in millions of dollars. They make up some unsustainable business plan where they will pay royalties from advertising or subscriptions. Then the owners try to bail out before the investors realize it'll never fly.

In the meantime, the content creators get screwed.

Everywhere you look, you see products being sold with free downloads. I saw one today that came with 65 free downloads. I don't think the product even cost but $50. How the hell are those royalties getting paid.

Cynical...just a bit.

I'm just calling it as I see it. IMO Wall Street and music don't mix well.

[ignatius]

Originally Posted by brightbyrd

Class Action Lawsuit.

You can't just buy a company but not buy their debt obligations.

actually.. you can. depends on the contract.. just ask the US federal government.. they took on a lot of the "toxic debt" from various mega financial institutions when they bailed out or forced banks to merge. just one example. the debt can go anywhere they want it to.

[ignatius]

Originally Posted by brightbyrd

Everywhere you look, you see products being sold with free downloads. I saw one today that came with 65 free downloads. I don't think the product even cost but $50. How the hell are those royalties getting paid.

a lot of digital distribution contracts allow for 1 or more songs (designated by the band/artist in many cases) to be available for promo purposes free of charge for us in just those kinds of product sales... w/IODA i know that for each album i can designate a track for a promo track if i want to and that track will be available in whatever promotional mojo IODA has going on if they so choose..

but the details are always different so strings may or may not be attached.. the content may get paid for somewhere down the line or buried in some financial woowoo wizardry. who knows.

[brightbyrd]

Originally Posted by ignatius

a lot of digital distribution contracts allow for 1 or more songs (designated by the band/artist in many cases) to be available for promo purposes free of charge for us in just those kinds of product sales... w/IODA i know that for each album i can designate a track for a promo track if i want to and that track will be available in whatever promotional mojo IODA has going on if they so choose..

Yeah, I thought about that - promotion. Kind of like the old record clubs. Buy 12 records for a penny kind of thing. But these downloads are not for specific songs or even a set selection. It's usually through a service (Rhapsody, etc.), so the real promotion is they are trying to get user's into the service.

but the details are always different so strings may or may not be attached.. the content may get paid for somewhere down the line or buried in some financial woowoo wizardry. who knows.

I would imagine if they are through a subscription type service then they should be paid somewhere along the line. But, like you said, who really knows.

[brightbyrd]

Originally Posted by ignatius

actually.. you can. depends on the contract.. just ask the US federal government.. they took on a lot of the "toxic debt" from various mega financial institutions when they bailed out or forced banks to merge. just one example. the debt can go anywhere they want it to.

OK, so where did the debt go? Someone else bought it? The government (taxpayers) sucked it up? So that Rupert and company can buy another yacht?

[ignatius]

Originally Posted by brightbyrd

OK, so where did the debt go? Someone else bought it? The government (taxpayers) sucked it up? So that Rupert and company can buy another yacht?

i think we'd all like to know those details.

the way it reads is "myspace bought some of Imeem's assets".. which means maybe they didn't buy the whole company.. just the snocap division or something.. and that may have been the only revenue generating part of the company? details details details.. i think maybe it means Imeem is skipping out on its obligation and myspace is free and clear since however they worded the contract it leads to them not assuming Imeem's liabilities.. or some such nonsense.

so, either that liability was left out of the compensation package for Imeem's owners or they just intended to write off that liability or something (meaning they put it in their pockets). so, myspace skipped out on it but legally they probably have it in the contract that Imeem is responsible for it which means it won't be rupert buying another yacht... probably someone at imeem. maybe myspace pulled a fast one on imeem and imeem didn't read the fine print. it's snarky kind of thing you'd expect from a rupert murdoch company.

[brightbyrd]

Originally Posted by ignatius

i think we'd all like to know those details.

the way it reads is "myspace bought some of Imeem's assets".. which means maybe they didn't buy the whole company.. just the snocap division or something.. and that may have been the only revenue generating part of the company? details details details.. i think maybe it means Imeem is skipping out on its obligation and myspace is free and clear since however they worded the contract it leads to them not assuming Imeem's liabilities.. or some such nonsense.

so, either that liability was left out of the compensation package for Imeem's owners or they just intended to write off that liability or something (meaning they put it in their pockets). so, myspace skipped out on it but legally they probably have it in the contract that Imeem is responsible for it which means it won't be rupert buying another yacht... probably someone at imeem. maybe myspace pulled a fast one on imeem and imeem didn't read the fine print. it's snarky kind of thing you'd expect from a rupert murdoch company.

Wow. That's some snakey sh*t.

[ignatius]

also, it's not debt as much it's just a liability on Imeem's books. meaning it's listed in their accounting ledger as money they owe and always has been.. even before they were sold. but, on the other side of the ledger is the assets column. when they sold assets to myspace their capital was increased and so on the books they were probably showing that profit from the sale. so, they have the cash.. it's just a matter of them doing the right thing with it and paying the artists who are owed compensation in good faith.

chances are that won't happen unless someone makes them do it since they will likely cry foul at myspace and myspace will say "no we didn't buy your liabilities" and then the whole thing could just end up in court.. or not.

maybe Imeem was just too stupid to make a good deal so that myspace would get the good w/the bad?