As the launch date nears for MySpace Inc.'s joint venture with three major record labels, its many rivals have begun to anticipate a new competitive landscape. Apple Inc. [AAPL], whose iTunes music store already faces off with rumored MySpace partner Amazon.com Inc.'s [AMZN] download store, will see redoubled competition from the new operation. Social network operator Facebook Inc. continues to gain strength from the proliferation of third-party applications on its platform, including music tools such as iLike Inc. And on-demand streaming music provider Imeem Inc., itself a social network as well, has taken steps to differentiate itself from MySpace Music, which will likely be its largest competitor yet.
Imeem confirmed Wednesday that it has hired a new public relations firm, Allison & Partners, after a report surfaced last week. Company vice president of marketing communications Matt Graves said Imeem will be engaging in "more aggressive media relations" as well as spending on consumer advertising, although the company won't be buying "700-foot billboards in Times Square" (MySpace Music has a sizable chunk of outdoor advertising there). Graves also pointed out that Allison represented YouTube Inc. prior to its acquisition by Google Inc. [GOOG], and said Imeem has "a similar consumer appeal" to that of the video site.
MySpace Music hasn't revealed any details regarding its upcoming service, but the site is believed to include free on-demand streaming songs from the full catalogs of the major labels involved: Warner Music Group Corp. [WMG], Sony BMG Music Entertainment Inc. and Universal Music Group. It's also rumored to include a playlisting function that can be integrated with millions of MySpace user profiles.
"Imeem invented the embedded flash playlist, which is a defining feature of our competition," Graves said, adding that the majors' move toward free ad-supported music is a validation of Imeem's original intent as well.
No one knows whether consumers will embrace MySpace Music, which will operate a retail store in addition to its ad-supported free music tools. MySpace has previously attempted to launch a music-buying service via a partnership with Snocap Inc., which never captured a large audience (and, indeed, Imeem itself acquired Snocap for its music-fingerprinting tools this spring). But the well-funded News Corp. [NWS] property will have massive resources at its disposal, posing trouble for a venture-backed startup such as Imeem -- even one backed by a strong venture syndicate that includes Sequoia Capital and Morgenthaler Ventures, as well as Warner Music.
Graves declined to comment on Imeem's past or future fundraising. The company is known to have raised $15 million from Warner, but never released details of its other rounds. - Paul Bonanos
See Sept. 24 press release from Imeem
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