Ad-Supported Music Deserves a Look

The music industry is broken. Any business whose main product is stolen far more than it’s bought can’t be considered anything else.

But how to fix it? Online and mobile music sales are still in their infancy; and it’s still unclear whether the vast  majority of people will be willing to buy songs for

their iPods they can simply download from their friends’ hard drives.

That’s why ad-supported music deserves a look.

The very idea probably seems heretical to music purists. But how obtrusive is putting banner ads on a music site? Even putting short ads in front of songs is not as unseemly as we might think; that, after all, is essentially what radio is.

Imeem, a fast-growing social community built around music, video and other media offers a hint of what music’s future might look like.

You can stream as much copyrighted music as you want for free. Banner ads by Discover, Microsoft Live Search and other advertisers help cover the royalties Imeem pays every time someone listens to a copyrighted track.

The concept has taken Imeem from zero to 18 million unique visitors a month since March 2006.

"We’ve signed three out of the four major and stream their entire catalogs," says Director of Business Development Ethan Applen, who is speaking Tuesday at iHollywood @ AFM in Santa Monica. "Our entire business model is built around given them a share of the ad revenue."

Users who wish to download music are directed to iTunes or Amazon to buy; Imeem gets a percentage of the revenue.

Labels or studios may also choose to pay for ads themselves to call attention to an act or movie. Members can also place their own material for free on the site. If enough users enjoy it, Imeem posts ads on the page and gives the content creators a share of the ad revenue, too.

Undoubtedly, you could poke plenty of holes in Imeem’s business model. But isn’t it nice to find someone in the music industry besides Apple who actually has one?

About Michael Stroud

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