updated 12:20 pm EDT, Fri July 3, 2009
imeem Music Store in Works
imeem is gradually building its own music store that may afford it independence from Apple's iTunes or Amazon MP3, an investigation has found. Normally, those buying permanent copies of music from the site must go through an Amazon or iTunes link and buy it off-site; quietly, however, the company has been adding direct-download MP3 purchases of its own for certain artists, such as Iron and Wine. The payment system is direct and uses either credit cards or PayPal.
The move is explained by TechCrunch as the result of a bid to improve imeem's initially struggling financial performance by negotiating download rights with labels and receiving larger cut of each download. Under the dominant existing system, it only gets the 5 percent affiliate revenue that comes from buying at a third-party store and consequently leans more heavily on the revenues from ads displayed on each page. Switching to a classic direct model gives it as much as 30 percent of every download without having to adjust prices or lose existing customers.
Expanding in this way creates a form of end run around Apple. Like Last.fm or Pandora, imeem runs its own Internet radio app for the iPhone but is unique for selling its own content on the desktop, letting users listen to the same tracks on either platform. Nonetheless, it's unlikely that imeem will completely abandon its iTunes connection. as Apple's current iPhone SDK rules prohibit apps from writing directly to a device's music library and would limit any permitted downloads to just the imeem app itself.