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Imeem restructures, chief marketing officer resigns

Steve Jang, one of the social network's top managers, and a vice president of advertising sales, resign. Imeem is the latest ad-supported music service to fall on hard times.

A clarification was made to this story.

Steve Jang has resigned as chief marketing officer at Imeem, the financially troubled social network.

Steve Jang has resigned as Imeem's chief marketing officer Imeem

Jang's departure had been planned for some time and was amicable, said Matt Graves, an Imeem spokesman. He added that Jang, who also led the company's business development unit, will remain associated with Imeem as a strategic adviser. Graves said Jang was leaving "to do something new" but would not disclose what that was.

In addition, the company's vice president of Western advertising sales has resigned. She, too, had planned to leave, Graves said. According to Graves, Imeem has also laid off six employees as part of a company restructuring. The company now intends to double efforts to make the service profitable.

Imeem streams music to users' PCs free of charge and has tried to support itself through advertising sales.

The reorganization of the company comes as Imeem fights to stay afloat and has asked investors and some of the top music labels for a new financial arrangement, according to a report by the news blog All Things Digital. Some of the investors and labels have agreed to new deals, according to the report.

Imeem is the latest ad-supported music service to stumble this year after Ruckus and SpiralFrog ceased operations.

There are several reasons being offered to explain why the sector is running into trouble. Nobody argues that the broader economic storm has sent the ad market into a free fall. But some say that top recording companies charge too much for the use of their libraries. In particular, critics say that the so-called penny-per-play rates charged by the labels is too high for ad-supported start-ups to pay.

This isn't the first time that Imeem has needed a bailout from the labels. In a story published by CNET on Monday, Graves acknowledged that the company has had previous success convincing the labels to renegotiate their financial arrangements with Imeem. A music industry source close to the negotiations said that the labels have given financial breaks to Imeem on several occasions.

Apparently, this time, some of the labels are balking, according to the report in All Things Digital.

Warner Music Group has declined to give Imeem better terms. Were Imeem to lose access to Warner's songs, its task of generating profits would become tougher. Many of the company's rivals do offer Warner's library.

There are plenty of people blaming the music industry for Imeem's troubles, but the music industry source said that the labels were less than thrilled with the job done by Imeem's management team. They say that some of its competitors, including MySpace Music and Bebo, are doing a better job of turning ad-supported music into dollars.

What's going to be interesting to see is how aggressive Imeem becomes at charging for services and how the company's following will respond.

Clarification at 6:27 p.m. PDT: A sentence in this story, as it was first published, could have been misconstrued to imply that Imeem currently does not have Warner Music Group's songs in its library. It does, in fact, have Warner's whole library available for streaming now.