MOG man does not agree with Imeem founder over the viability of digital music start ups

By | Published on Monday 25 October 2010

The mouthy boss of US-based streaming music service MOG, which is planning a UK launch as we speak, has hit out at comments made by the founder of the now defunct Imeem last week about the challenges of developing viable digital music services.

Imeem founder Dalton Caldwell said in a speech last week that the demands and inflexibility of the record companies made it impossible for digital start-ups to launch viable music services, because the upfront fees and royalties that have to be paid are unrealistic.

He also postured that the only way the digital music market could gain proper momentum would be if government added digital to the compulsory licensing system, so that labels would be obligated to license their music to digital firms at pre-agreed rates via collecting societies.

But MOG man David Hyman does not concur. Writing for TechCrunch, he says: “It’s hard work getting deals done with the labels. They have limited business development resources and can’t make thousands of bets. [But] contrary to what Dalton conveyed, the labels don’t require you to do deals that make no economic sense. For example, MOG is very happy with the realistic minimum guarantees that were set, all of which we’ve hit. You have to come to the labels with a great idea, a great product and a model that works”.

On the compulsory licensing point, he added: “As for Congress getting involved with statutory rates, it’s my opinion that these rates and not letting the free market dictate how this area evolves will be the death of the music industry. Can you imagine, Congress coming up with how much a label (and ultimately an artist) can make by placing caps on the industry? I assure you that would be the industry’s quickest decline, as it would become impossible for labels to make bets on new talent”.