Universal Music Signs With Free Music Site imeem

Universal Music Group has signed on with imeem, the free music site/social network. The UMG deal means that imeem now has deals with all four major music labels, making it the only ad-supported music site to do so. CEO Dalton Caldwell says imeem’s 19 million users will now have access to 4 to 5 million songs on the site – approaching the 5 million-plus songs on Apple’s (AAPL) iTunes.

Next up: Figuring out how to stay afloat. imeem’s business model is a little easier to understand than rivals Spiral Frog and QTrax, because it only gives users the chance to stream songs, not to download them. That makes licensing and payment a bit easier to figure out. But the model is basically the same: imeem will have to pay the labels an upfront fee, and then pay them a 50/50 split of all advertising revenue.

To date those upfront fees have posed a huge stumbling block for Spiral Frog and QTrax (as well as other online music vendors). But Caldwell says imeem will be able to generate enough ad revenue to cover costs: Even without UMG’s music, he 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.

Related: SAI imeem Coverage

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