Warner Music hooks up again with Imeem
A month after writing down its $16 million Imeem investment, Warner agrees to take a larger stake in exchange for a new licensing contract that asks for less money.
Weeks after writing off its Imeem investment, Warner Music Group has once again thrown in with the video- and music-focused social network, a source confirmed on Monday.
Only this time, Warner doesn't have to dip into its wallet to acquire an even larger interest in the start-up, according to a story by Peter Kafka at All Things Digital, who broke the news.
What the third largest recording company has agreed to give up for the stake is to rip up the old licensing contract and create a new one that asks for less money each quarter, according to Kafka. My source, who is familiar with the deal, confirmed this.
Warner didn't appear happy last month about having to write down $33 million, most of it from investments made in music site Lala and Imeem.
Warner Music's writedown--$16 million in Imeem and about $11 million in Lala--is avaluations during the economic downturn, said Edgar Bronfman Jr., Warner Music's CEO at the time.
The top four music labels--Universal Music Group, Sony Music Entertainment, Warner, and EMI--have all been relaxing the financial terms they require from start-ups.
Too bad SpiralFrog and Ruckus couldn't have held out a few more months, perhaps the music services thatearlier this year might have negotiated better terms.