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MySpace-Imeem Deal Leaves Indie Artists Unpaid

kdawson posted more than 4 years ago | from the gladly-pay-you-tuesday dept.

Music 124

azoblue writes with news that following MySpace's acquisition and shutdown of imeem, independent artists who sold their music through imeem's Snocap music storefronts (on MySpace and other sites) won't be paid what's owed them. More than 110,000 artists are believed to be affected. The crux of the problem is that MySpace acquired only a certain portion of the assets that were imeem — "the domain name and certain technology and trademarks" — and not imeem’s outstanding debts, including the money imeem owed to artists under the Snocap relationship. According to the article, some artists have been owed money for more than a year. "Napster creator Shawn Fanning co-founded Snocap in 2002 to let artists sell their music through an embeddable storefront widget. At one point, the service was marketed as the exclusive way for artists to sell music on MySpace. Imeem bought Snocap last summer. But because MySpace left most aspects of Snocap out of its acquisition of imeem’s assets, all 110,000 or so of those storefronts are gone. The server that hosts them is offline and so is the Snocap website."

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Myspace is fast losing relevance (1, Insightful)

dikdik (1696426) | more than 4 years ago | (#30422082)

The combination of crappy layouts, shoddy design, counter-intuitive interface, and juvenile audience are all working together to render Myspace irrelevant. I just checked my myspace page, apparently for the first time since May of this year. Nothing's changed...

Re:Myspace is fast losing relevance (0)

Anonymous Coward | more than 4 years ago | (#30422096)

What's MySpace? Is it like tweeter or facebooks?

Re:Myspace is fast losing relevance (2, Funny)

PopeRatzo (965947) | more than 4 years ago | (#30422182)

What's MySpace?

It's Facebook for even bigger losers.

Re:Myspace is fast losing relevance (1, Funny)

AmberBlackCat (829689) | more than 4 years ago | (#30425052)

The question was, "what is MySpace". Not, "what is Slashdot?"

Dupe (0)

Anonymous Coward | more than 4 years ago | (#30422114)

I've read this exact same comment before.

They're indie artist for a reason. (-1, Troll)

Anonymous Coward | more than 4 years ago | (#30422086)

They are not very good. And so they should not be paid. Give me the mainstream anyday!

Re:They're indie artist for a reason. (3, Funny)

MrNaz (730548) | more than 4 years ago | (#30422156)

You take that back before I give you the Celine Dion Limited Edition Discography including audio of her interviews and outtakes!

Re:They're indie artist for a reason. (2, Funny)

Farmer Tim (530755) | more than 4 years ago | (#30422210)

Your threat is feeble. I have recordings of Britney Spears singing without AutoTune, which I understand are prohibited by the Hague Convention...

Re:They're indie artist for a reason. (1)

Glendale2x (210533) | more than 4 years ago | (#30423550)

Out of morbid curiosity, I do wonder what that would sound like.

Re:They're indie artist for a reason. (1)

Farmer Tim (530755) | more than 4 years ago | (#30423876)

You asked for it [youtube.com] !

Good indie music? (-1, Troll)

BadAnalogyGuy (945258) | more than 4 years ago | (#30422132)

There is "indie" music which is just as commercial as the popular music genre. Siouxsie and the Banshees comes to mind as something that is "indie" but really pretty mainstream.

Then there is indie music which is really independent. The guy with the Fender down at the tavern or the guy with his Ibanez out on the sidewalk or the crazy New Age woman with long unkempt hair singing at the bottom of the stairs in the subway are all "artists" that come to mind when I think of indie artists.

The difference between these two types is simply the quality of their music. The latter being mostly a mass of untalented hacks.

So when I hear that indie musicians are being somehow screwed out of money, I have to wonder how much money they are really missing out on. Who are their customers? Are there any really good indie artists?

Re:Good indie music? (1)

mftb (1522365) | more than 4 years ago | (#30422166)

I think you are implying that "indie" is a permanent status, that good production makes musicianship better and that talent is always popularised.

Re:Good indie music? (1, Insightful)

Anonymous Coward | more than 4 years ago | (#30422380)

Good production does make musicianship better.

If you bring in a decent producer, they will work with the band before they get anywhere near a recording studio, and during the recording as well.
This involves tightening up the arrangements, working on the parts and the performances, all to bring out the essence of what is good about the song, and knowing how to get the most out of the performers.

That's what a producer does, and that is why a good producer can turn an average bands record into a great one.

Of course, most bands can't afford George Martin or Rick Rubin or whoever as a producer, but they would almost certainly benefit if they could.

Re:Good indie music? (4, Insightful)

icebraining (1313345) | more than 4 years ago | (#30422168)

Why does that matter? People bought their music, they should get paid.

Re:Good indie music? (-1, Troll)

BadAnalogyGuy (945258) | more than 4 years ago | (#30422204)

Don't conflate my question with my stance on the artists' situation. If they've got customers, more power to them. I'm just surprised there are 110,000 artists getting screwed out of revenue. I'd be less surprised if it were merely a handful of indie artists getting screwed.

Talent must be out there, I'm sure. Infinite monkeys, you know.

Re:Good indie music? (1)

Devout_IPUite (1284636) | more than 4 years ago | (#30422216)

BadAnalogyGuy was suggested that people DIDN'T buy their music. That they maybe sold $10 of music or less.

Re:Good indie music? (2, Insightful)

zippyspringboard (1483595) | more than 4 years ago | (#30424032)

So let me get this straight. While thousands of artists got ripped off, the vast majority only sold a single album or two. Therefore they are only getting screwed for a couple bucks eack, perhaps $10 at the most... And besides they were shitty bands and sucked. Therefore it's perfectly Ok???? nobody got hurt, nobody suffered more than the loss of a combo meal, so it's no problem??

Re:Good indie music? (1)

Devout_IPUite (1284636) | more than 4 years ago | (#30424376)

Yup, that's what he said. Most of the bands lost between nothing and next to nothing, so no big deal. Not what I said, I was just clarifying for icebraining. I'm kinda neutral on this.

Re:Good indie music? (5, Insightful)

PopeRatzo (965947) | more than 4 years ago | (#30422258)

Why does that matter? People bought their music, they should get paid.

I know, right?

More importantly, people not only bought their music, but they paid imeem for it, which basically just kept the money instead of honoring their contract with the artists.

In the sale of imeem to myspace, you can bet the lawyers got paid, and the guys from imeem got theirs. MySpace should honor every one of those contracts instead of just writing them off as "bad" debt.

You can bet that if it was the artists who were the ones breaking the contract with imeem or myspace, lawyers would be crawling up their asses with wire brushes.

This is why I hate to do business with anyone that I can't actually go put my hands on if need be. I do it of course, but I hate it.

Re:Good indie music? (2, Insightful)

Interoperable (1651953) | more than 4 years ago | (#30422676)

...and the guys from imeem got theirs.

If only part of imeem was purchased, the revenue from the sale should have gone into paying existing debts. Once those were covered, the execs would be able to take home the remainder. If that didn't happen, the people who got the money are in trouble (assuming the artists lawyer up).

MySpace would be on the hook if all of imeem had been purchased but it wasn't. It still exists so it still owes the artists money which should be paid for out of the sale revenue. Someone at imeem still owes money.

Re:Good indie music? (1)

tyroneking (258793) | more than 4 years ago | (#30423404)

>> This is why I hate to do business with anyone that I can't actually go put my hands on if need be. I do it of course, but I hate it.

Second that - myself and some colleagues were once denied payment for some work by an intermediary because the end-client had not paid my client. I offered to walk off site and sit in the intermediary's office (a 10 minute bus ride away) with my colleagues and a small selection of sports equipment. Naturally the matter was resolved in a few days.

The mistake that some musicians made, I guess, was to continue to sell thru Imeen when the first due payment was missed. At that point they should have devoted their efforts to bad mouthing them until they failed a lot earlier - they are musicians after all and they always seem to have a lot more public clout than they really deserve.

Re:Good indie music? (2, Insightful)

Alphanos (596595) | more than 4 years ago | (#30423862)

Seriously guys, anyone blaming MySpace for this isn't grasping what has happened. This is like if you are going bankrupt, so you hold a yard sale to pay off your debts. John Doe buys some of your stuff. In the end you still can't pay all your debts, so the people you haven't paid go after the guy who stopped by your yard sale? Wait, what?

Re:Good indie music? (1)

shentino (1139071) | more than 4 years ago | (#30423860)

No they shouldn't.

Not unless we want to change bankruptcy law.

The indie artists probably don't even have the right to collect anymore since they apparently forbore nonpayment for a very long time without raising a fuss.

They let imeem slither on without paying and should have taken imeem to court for contract breach. They didn't, sucks to be them.

Re:Good indie music? (1)

piepkraak (989721) | more than 4 years ago | (#30422184)

You're joking, right? Atmosphere for example, and there are thousands of example of high profile indie artists.

Re:Good indie music? (1)

PopeRatzo (965947) | more than 4 years ago | (#30422206)

Siouxsie and the Banshees comes to mind as something that is "indie" but really pretty mainstream.

Let me assure you, when Siouxsie and the Banshees released "Oh Bondage, Up Yours" in the late 1970's, they were extremely transgressive for the time. They were far outside of the mainstream marketing sector known today as "indie", which is basically mainstream culture cleverly repackaged to let good little consumers think they are edgy.

Think: "Give me a vente mocha skim latte...in a dirty cup."

Re:Good indie music? (3, Insightful)

mftb (1522365) | more than 4 years ago | (#30422218)

I've been trying my best to ignore that particular definition of "indie". It's difficult, so instead I use the word "independent" whenever possible.

Re:Good indie music? (1)

great om (18682) | more than 4 years ago | (#30422308)

um, oh bondage, up yours was X-Ray Specs (http://en.wikipedia.org/wiki/X-Ray_Spex). Never went mainstream, was an awesome album

Re:Good indie music? (1)

vivaelamor (1418031) | more than 4 years ago | (#30422340)

when Siouxsie and the Banshees released "Oh Bondage, Up Yours"

Uh, "Oh Bondage, Up Yours!" was a song by X-Ray Spex, not Siouxsie and the Banshees. BTW, all of the labels Siouxsie and the Banshees have been on appear to have been bought by UMG.

Re:Good indie music? (1)

maggotbrain_777 (450700) | more than 4 years ago | (#30423958)

Siouxsie and the Banshees never recorded "Oh Bondage, Up Yours". That was X-Ray Spex.

Re:Good indie music? (2, Informative)

thePowerOfGrayskull (905905) | more than 4 years ago | (#30422478)

That misses the point though. Nobody ever said "indie" meant "good". You're a "real" indie if you're not with a major label. The quality of your work is irrelevant to both your status as "indie" and whether or not you've earned the money you're owed.

Re:Good indie music? (1)

Runaway1956 (1322357) | more than 4 years ago | (#30422576)

You seem to be suggesting that the major labels promote real talent. I would have to differ with you. Have you really LISTENED to those rappers, or Britney, or - any of them? Absolute shit. My kid doesn't know squat about music, but I'd rather listen to him strum on his guitar than the tortured sounds that most CD's force through the kid's speakers. You would have to smoke something, or shoot something up, to enjoy most of the "music" being pawned on America today. Rap - a - rappa - rap - rap - rappa!

Re:Good indie music? (1, Funny)

BadAnalogyGuy (945258) | more than 4 years ago | (#30422984)

Sir, I'd appreciate it if you could tell me where to find your lawn. I have the strange urge to get off it.

Re:Good indie music? (1)

Runaway1956 (1322357) | more than 4 years ago | (#30423184)

North America, less Mexico. ;^)

Re:Good indie music? (5, Insightful)

hairyfeet (841228) | more than 4 years ago | (#30423162)

But you are making the same mistake, basing quality on commercial potential. For why that don't work, just come on down here to the south and take a stroll down places like Beale Street in Memphis, or the "musical main" street in LR, AR. Here you will find some really incredible players playing some truly awesome "get yo ass up and let's have some fun" R&B, blues, funk, soul, rockabilly, all truly great stuff. But in all likelihood you will NEVER hear of these guys outside the clubs, and they will never get famous. Why?

Because those styles of music isn't considered "popular" by the guys that hunt for record labels and the stations they market to. They know how to sell Britney and teen pop idol crap, not good old fashioned Muddy Waters style blues, wall shaking rockabilly and R&B that has such a hard driving beat it'll shake your bones, etc. They don't like it, or get it, so it just won't be marketed. Then there are those that refuse to sign over all rights to everything they'll ever make, which in the business today means they'll never have a contract, because the industry is so tilted in favor of the money men.

So please don't mistake "commercial potential" for quality, because the ones that decide that are the same ones that gave us pop idol crap and mall band pretty boy o' the week. I've got plenty of independent CDs made by guys and gals that if you and your girl saw them on any Saturday night would have you out on the floor laughing and dancing and having a damned good time, but they just don't fit into one of the cookie cutter "popular" molds that the A&R guys only seem to care about. And as far as they are concerned that is fine, because it is about THE MUSIC, not whether they'll get a gold plated bath tub or not.

Re:Good indie music? (1)

PenisLands (930247) | more than 4 years ago | (#30423572)

As 'untalented' as they might be, at least they're making an effort to be creative... unlike you, one who doesn't do much more than make shitty troll posts on slashdot.

Re:Good indie music? (1)

gemada (974357) | more than 4 years ago | (#30424222)

"indie" just means that they aren't on one of the 3 or 4 major labels that control 97% of the music in the world. It has nothing to do with the quality of the music. if you want to see untalented hacks just turn on a top 40 radio station. Most of the quality musicians/bands in the world are on independent labels. See Arts & Crafts (http://www.arts-crafts.ca/artists.php) as an example of talented artists on an indie label.

Class Action (1)

ProzacPatient (915544) | more than 4 years ago | (#30422134)

I smell a class action suit brewing.. or at least some kind of mass legal action if these artists are not payed.

Re:Class Action (1)

MrNaz (730548) | more than 4 years ago | (#30422162)

Against whom?

Re:Class Action (1)

PopeRatzo (965947) | more than 4 years ago | (#30422278)

Against whom?

Myspace for starters. Go after the principles of imeem, too. Only snocap was blameless in this.

Fortunately, karma is heading toward myspace like a runaway freight train. My guess is they'll be going by a different name this time next year.

Re:Class Action (1)

MrNaz (730548) | more than 4 years ago | (#30422766)

Myspace bought imeems assets, they have nothing at all to do with the liability that was created before they had anything at all to do with Snocap. Why would they be liable for anything at all?

People these days are litigation crazy. Something, anything goes wrong and they want to sue everyone in sight whether or not they have anything to do with anything.

Re:Class Action (1)

Bacon Bits (926911) | more than 4 years ago | (#30422940)

If Imeem is bankrupt, it may not be legal for them to sell assets without compensating or making good on their debts. Any monies that result from the sale of Imeem assets should go towards the debt.

Re:Class Action (1)

Artifakt (700173) | more than 4 years ago | (#30423254)

True, but the only way this affects, or should affect, Myspace is if they somehow knew there was a plan to screw the artists out of their share. That's difficult to prove. Imeem still had a right to sell assets, even if that right was presumably limited by the requirement to use those funds from the sale to pay off their debts. This isn't like a case of receiving and concealing stolen property, where both parties can be completely bared by the law from making a legal contract - baring proof of some sort of collusion, the contract itself is still entirely legal. Myspace had legitimate intent (unless someone can prove otherwise), and Imeem had legitimate intent towards Myspace even if they may have had intent to defraud other parties that were not in the contract.

Re:Class Action (1)

davester666 (731373) | more than 4 years ago | (#30423290)

Yes. Unfortunately in this situation, it appears that Imeem sold off their assets as part of bankruptcy proceedings, and all the artists are part of a group collectively known as "unsecured creditors", sometimes known as "the ones who take it up the ass". Banks and probably the major labels would be part of the group of "secured creditors", commonly referred to as "robber barons", and most likely will have already received most/all of any money received from MySpace.

Re:Class Action (1)

NormalVisual (565491) | more than 4 years ago | (#30423646)

Banks and probably the major labels would be part of the group of "secured creditors", commonly referred to as "robber barons", and most likely will have already received most/all of any money received from MySpace.

Of course, that's "most/all of any money" after the IRS gets through with them. Back taxes are 1st priority in any BK proceeding, and being a secured creditor doesn't mean squat if they owe more to the IRS than they have in assets.

Re:Class Action (1)

kamikazearun (1282408) | more than 4 years ago | (#30422186)

paid != payed

Re:Class Action (4, Interesting)

hedwards (940851) | more than 4 years ago | (#30422762)

Actually paid == payed. Payed is an archaic form of paid, which is obsolete in most circumstances. Apparently it's still correct in the nautical use as well as for payed subscriptions. Hell even the spell check in Firefox accepts it as legimit.

If you're going to be one of those annoying grammar nazi pricks, the least you could do is be right.

Re:Class Action (2, Funny)

Anonymous Coward | more than 4 years ago | (#30422852)

Does it accept "legimit" as well, or is that just an archaic form of legitimate?

Re:Class Action (1)

kamikazearun (1282408) | more than 4 years ago | (#30422862)

Hell even the spell check in Firefox accepts it as legimit. If you're going to be one of those annoying grammar nazi pricks, the least you could do is be right.

I have nothing to say/do here. The joke seems to have cracked itself this time around.

Re:Class Action (0)

Anonymous Coward | more than 4 years ago | (#30423016)

Anyone nit-picking enough to write a letter of correction to an editor doubtless deserves the error that provoked it. - Alvin Toffler

That's insolvency (4, Informative)

DaveGod (703167) | more than 4 years ago | (#30422138)

This is what happens in insolvency. There isn't enough money to pay debts. Occasionally the entire business will be worth enough to someone that they will be willing to take on the liabilities, but most of the time there is no option but to sell off whatever does have some value as assets. Myspace didn't buy imeem, they bought some of their assets.

The money paid for the assets will go towards paying creditors, though creditors are usually ranked so that a lender with a fixed security (e.g. bank loan) get paid first, then it's the employees, and down it goes. The order is broadly as fair as possible in the circumstances (not to say that it's satisfactory to anybody who doesn't get their money, but the money simply isn't there to do so).

There’s nothing technically wrong with MySpace Music only acquiring certain assets from imeem

Nor is there anything morally wrong with it. The fault it wholly with imeem. It failed, it could not pay it's debts. To imply Myspace is at fault here is completely false since their offer was the one that returns the most money to imeem's creditors - it makes more (but still not much) sense to say every single other entity on the planet is more at fault than Myspace, because none of them made a better offer.

(Not that I like MySpace, and certainly not Newscorp, but that's just how it is)

Re:That's insolvency (3, Insightful)

drinkypoo (153816) | more than 4 years ago | (#30422154)

And just to back up your point, artists who want protection from this kind of implosion need to join/form a co-op, in which they are the shareholders. That way, they get part of the payoff when the whole thing goes tits up.

Re:That's insolvency (4, Funny)

Chelloveck (14643) | more than 4 years ago | (#30422200)

Some sort of Recording Industry Association, then?

Re:That's insolvency (2, Insightful)

drinkypoo (153816) | more than 4 years ago | (#30422214)

Some sort of Recording Industry Association, then?

You jest, but it's clear that what is needed is a Recording Artists Association; by, of, and for the artists, and not the labels, who are the members of the RIAA.

Re:That's insolvency (0)

Anonymous Coward | more than 4 years ago | (#30423120)

I think they should call it the music performing artists association.

Re:That's insolvency (1)

Mikkeles (698461) | more than 4 years ago | (#30423396)

United Artists [wikipedia.org] began in just this fashion and for similar reasons: big name actors and actresses wanted more of the pie.

It has changed over the years.

Re:That's insolvency (0)

Anonymous Coward | more than 4 years ago | (#30424346)

It always does.

Re:That's insolvency (0)

Anonymous Coward | more than 4 years ago | (#30422228)

Wrong.

Shareholders are always last in the line of creditors when a company folds - after banks, employees, suppliers, etc.

And that is a good thing.

Re:That's insolvency (1)

PopeRatzo (965947) | more than 4 years ago | (#30422320)

And just to back up your point, artists who want protection from this kind of implosion need to join/form a co-op, in which they are the shareholders.

That works.

Also, if someone tells you that they'll sell your work you and send you a fraction of the money, run for the hills. Learn a little business, a little arithmetic. You absolutely can do it yourself and make a living at it. You want to see a smart business model for musicians? Go look at www.residents.com. Some of the most "outside" music you can find and they've been able to make it fly since the 70's.

Re:That's insolvency (1)

moosesocks (264553) | more than 4 years ago | (#30422730)

Actually, yes. This is exactly the sort of thing that the RIAA should be fighting. At the very least, artists should be fighting to get a small cut of what they were originally owed.

Of course, the RIAA has various political interests (including the failure of online distribution), so this probably won't happen.

The fact that the RIAA couldn't even prevent the loudness wars shows that they've long since given up on their artists.

Out of scope (2, Informative)

Sensei Eggwoah (1104847) | more than 4 years ago | (#30423042)

From http://www.riaa.com/aboutus.php [riaa.com] :

The Recording Industry Association of America (RIAA) is the trade organization that supports and promotes the creative and financial vitality of the major music companies..."

The RIAA does not represent the rights of independent artists and I am not sure they ever pretended to. They represent large scale music distributors.

Re:That's insolvency (0)

Anonymous Coward | more than 4 years ago | (#30423500)

Just thought I'd ask....are there any actual artists on this site? Anyone here with any actual, firsthand knowledge about which they speak?

Because there are so many people with such strong opinions here, I'd hope they all actually knew what they were talking about.

Re:That's insolvency (0)

Anonymous Coward | more than 4 years ago | (#30422788)

Actually, shareholders get the shaft in bankruptcy as well. They are below suppliers in the bankruptcy food chain. The co-op would need to have a contract with the company that gives them senior rights to bankruptcy proceeds. The downside is no bank would loan money to such a structured company.

Re:That's insolvency (0)

Anonymous Coward | more than 4 years ago | (#30422290)

Well, who got the money that MySpace paid for those assets? Normally all debtees would get the same percentage of their receivables. Suppose the assets cover 20 percent of the debt, then every debtee should get 20 percent of what they're owed. I have a feeling that that is not what happened.

Re:That's insolvency (1, Insightful)

PopeRatzo (965947) | more than 4 years ago | (#30422300)

The order is broadly as fair as possible in the circumstances (not to say that it's satisfactory to anybody who doesn't get their money, but the money simply isn't there to do so).

Do you doubt that the legal fees involved in the sale of imeem to myspace was much greater than the amount owed to the artists? I bet there was "there" to pay the lawyers, right? But the people who actually made the products that were sold? No money for them.

Remember, the people who bought the music from imeem paid for it. Imeem got that money.

If the artists were the ones breaking the contract, you can bet imeem and/or myspace and newscorp wouldn't stop until they were completely ruined.

Re:That's insolvency (5, Informative)

cowboy76Spain (815442) | more than 4 years ago | (#30422312)

First of all, insolvency is when there is not enough liquid assets (moneys or goods easily converted to money) to cover short term obligations. In this case the most usual measure taken is oversight of the bussiness, often by an administrator apointed by a judge, but to try to continue running the bussiness*. The term when there are not assets (even those that need more term to be sold / cashed in) to cover obligations is bankruptcy, and it is when the remaining assets and distributed amongst creditors.

In this case, I think MySpace can be in trouble by the fact that they sold and rebought the bussiness in so little time. The charge could be fraudulent bankruptcy; setting a different bussiness from your assets in order to get back the assets while leaving the debts for the spin-off (that later gets bankrupt. If this was a Mafia film, think of bar buying liquor in mass in order to resell it cheaply, because when the time to pay for it comes it has been arsoned.

Of course I am not telling that MySpace has done that, but someone could try to present this to court and get to have a trial about it.

Also, if there is proof that some deal has been done in bad faith (for example, for both or one party knowing that the deal will rip off the artists while making the companies win a lot of money, a judge could also declare it void).

In summary, the bussiness and executives have been trying harmful ways to get money from everyone for a lot of time, and there are already laws in place to try to avoid this (of course they don't always succeed), so it may not be as clear cut as you think it is

.

(*) I am talking of Spanish Civil Law here, YMMV.

Re:That's insolvency (1)

DaveGod (703167) | more than 4 years ago | (#30422694)

I wasn't aware that MySpace had previously owned the company? There is nothing in TFA nor on Wiki which has a company history. I'm going to assume you're wrong on this for the time being (otherwise you've picked up on the most significant and interesting part of the story that Wired has completely missed).

I kept it (over) simply on the whole insolvency/bankruptcy thing because the area is very complicated with lots of options (particularly in US and UK) and it was not important to my point, and in practice one rarely comes without the other.

To respond to some other posts:
- Yeah their lawyers would have got paid for their work on this deal. Any historic debt owed to them however will fall in with all the other creditors. It's illegal to give any preferential treatment to any creditor (other than securities, mentioned below, which are "fair" because they are published and hence all other creditors knew [or should have known...] about that beforehand). People doing work after insolvency get paid for that work because otherwise nobody would do any work!

So where will the money go? Broadly:

1. Creditors with fixed security - usually a major lender (e.g. bank loan) will be secured on specific assets such as owned premises, in this case it appears that security was placed on the brand and trademarks (from TFA: "The asset sale to MySpace Music was part of a foreclosure process which resulted from the lien certain secured creditors had on all the assets of imeem"). In event of default (not necessarily insolvency etc!) the creditor more or less owns the asset they had the charge on - if it is insufficient to cover the debt the remainder falls in with the unsecured creditors.

2. Preferential creditors i.e. employees. Some countries also include taxation and debts arising from court cases.

3. Creditors with floating charges - this security floats above all of the assets of the company and only crystallises in the event of insolvency etc.

4. All other creditors.

5. Shareholders

Re:That's insolvency (1)

cowboy76Spain (815442) | more than 4 years ago | (#30423130)

Yes, I have revised TFS and TFA and I don't know why I got the idea that MySpace had previously owned imeem (maybe the fact that it was "the exclusive way for artists to sell its music through MySpace", but of course I made an incorrect assumption there). Please ignore my paragraphs two and three.

Anyway, the deal still may be brought to the courts to find if it can be nullified.

Re:That's insolvency (1)

gabebear (251933) | more than 4 years ago | (#30422810)

The terms "Bankruptcy" and "Insolvency" aren't very good for general discussion because their meaning varies so greatly. In the UK, bankruptcy doesn't apply to corporations [wikipedia.org] , and insolvency can mean either a cash flow(short term) problem or a balance sheet(business is tits up) problem [wikipedia.org] . Not to mention differences between Chapter-11 bankruptcy(US) and going into administration/receivership.

Re:That's insolvency -- Error detected (1)

cowboy76Spain (815442) | more than 4 years ago | (#30423092)

Revisited: In answer to DaveGod post, I revised TFA and TFS and, indeed, the fact that Myspace had previously owned Imeem is not present there and was an error on my side. Please ignore that from my original post (second and third paragraphs).

Apart from that, I mantain the rest of the post.

Sorry for the inconvenience.

Re:That's insolvency (1)

tompaulco (629533) | more than 4 years ago | (#30422332)

But whatever funds were used to purchase Imeem don't just get to sit in the pocket of the owners of the company. All of that money is supposed to be used to pay down whatever debts there may be. I'm not sure where the musicians sit in the rank of debts to pay down, but hopefully they rank higher than the shareholders, which as someone pointed out below, rank pretty much dead last.

Re:That's insolvency (1, Insightful)

Anonymous Coward | more than 4 years ago | (#30423276)

In the US, it's the IRS, bondholders, secured lines, unsecured lines, unless, of course, president Obama decides to steal a billion dollars from bondholders, in which case, they get skipped. See GM.

Re:That's insolvency (1)

Attila Dimedici (1036002) | more than 4 years ago | (#30424356)

In most states, if Company A acquires most of the assets of Company B (what percentage depends on the specifics of the situation), Company A is liable for the debts of Company B. If Imeem was in bankruptcy this law would not apply, but I haven't seen any mention of bankruptcy in any of the stories.

Re:That's insolvency (1, Interesting)

Anonymous Coward | more than 4 years ago | (#30424588)

Exactly. This is what happened when the computer book publisher glasshaus (Wrox, Friends Of Ed) went down. They pulled the classy stunt of locking the door on the quarterly payday just to maximize what they owed authors and give the authors minimum forewarning on paying their own bills. And the authors never got a dime after -- the "artists", the term RIAA etc like to fling around to mean the musicians and writers, always get paid last. Which means never in any sort of meltdown. That's how publishing is structured, and why it's total bullshit when these outfits claim they are protecting artists' rights.

(Posting AC because I still have a couple of active contracts, and if you look at any contract you'll see the author can never say anything mean or simply less than positive about publishers or the work. And legal threats aside, it's alway my-dog-ate-it tooth-pulling to find out where the late cheque is every quarter. I don't care to make that more work than it already is.)

How long until (2, Insightful)

Norsefire (1494323) | more than 4 years ago | (#30422144)

They blame piracy for their predicament?

Re:How long until (1)

Jesus_666 (702802) | more than 4 years ago | (#30422268)

Very long. Most independent artists aren't content industry corporations.

Re:How long until (1)

PopeRatzo (965947) | more than 4 years ago | (#30422334)

They blame piracy for their predicament?

If they haven't yet, they will.

I don't know about that but (1)

commodoresloat (172735) | more than 4 years ago | (#30424572)

Glenn Beck is already blaming Obama.

Meet the new boss (1, Interesting)

fragmatic43 (1699440) | more than 4 years ago | (#30422148)

Everyone said it was just the nature of the old media moguls to steal the money from the artists. The new Napsterites were supposed to be purer and they would never do anything bad to the artists. But maybe this was just camouflage for their anarchy. Bummer...

Re:Meet the new boss (3, Funny)

MrNaz (730548) | more than 4 years ago | (#30422176)

No, I think it was camouflage for their total inadequacy when it came to running a business.

Re:Meet the new boss (1)

freedumb2000 (966222) | more than 4 years ago | (#30422302)

I think it is time for a community run, non-profit clearinghouse and distribution channel with transparent accounting for these artitsts to publish and distribute their music through. These artistic commodities do not belong being controlled by a single commercial entity.

Cue up the Lawyers (5, Interesting)

salesgeek (263995) | more than 4 years ago | (#30422150)

I've been through asset both buying and selling. It will be hard for MySpace to pull this off as the courts may not see the sale as a pure asset sale. It's one thing when you sell buildings and plant equipment. It's quite another when you sell the essence of the business: the brand, key employees and the customers and vendor relationships (musicians). Unfortunately, because this likely will be a class action, the musicians will be screwed a second time when the lawyers swoop in and get 40-60% of the settlement.

Time to cue up "That old class action" by Dewey, Cheatham & Howe.

Re:Cue up the Lawyers (1)

moosesocks (264553) | more than 4 years ago | (#30422770)

Sadly, thanks to the recession, this sort of practice is becoming more commonplace. A similar thing happened a few years ago with K-Mart, and this year with GM. Both brands survived relatively intact, but had most of their debts relieved (and screwed their investors in the process). GM, in particular, seems intent on making its emergence from bankruptcy as destructive and painful as possible (Pontiac, Saab, and Saturn were all viable businesses that got squashed. The attempted sale of Saab in particular reeked of bad faith on the part of GM)

Re:Cue up the Lawyers (0)

Anonymous Coward | more than 4 years ago | (#30423758)

Saab was in no way a viable business on its own, and Pontiac and Saturn essentially only sold rebadged models from GM's other divisions.

In my home country... (1, Interesting)

Anonymous Coward | more than 4 years ago | (#30422152)

...that is, France, I believe this kind of scam is downright illegal, and specialized courts that deal with commerce do frown upon selling assets and leaving the debt to a straw company. They are usually declared de facto bound to one another and treated as one entity. But then again, IANAL. Sounds reasonable though.

Re:In my home country... (0, Flamebait)

PopeRatzo (965947) | more than 4 years ago | (#30422348)

In my home country...that is, France, I believe this kind of scam is downright illegal, and specialized courts that deal with commerce do frown upon selling assets and leaving the debt to a straw company. They are usually declared de facto bound to one another and treated as one entity

Yes, but here in America, we're a Free! Country! with a Free! Market! which means that anyone with any money or power is Free! to fuck over anyone who doesn't have power or money.

Tie (1)

flak89 (809703) | more than 4 years ago | (#30422208)

But these guys who own MySpace are wearing ties, so it's OK if they owe money to artists and do not pay.

Re:Tie (0)

Anonymous Coward | more than 4 years ago | (#30422272)

I guess, because the people not wearing ties don't either.

They stole from artists? (3, Funny)

Sooner Boomer (96864) | more than 4 years ago | (#30422222)

Better get the RIAA after them! Oh, wait...

Why? (0)

Anonymous Coward | more than 4 years ago | (#30422226)

What's the point of buying a brand name and trademarks, the face of the company, then ruining half of it by leaving all the previous owner's liabilities unresolved? "Technologies"? Really? Wasn't Imeem considered fairly inferior in that department? I suppose this is MySpace we're talking about though...

Imeem Now Has Money to Pay Artists (1)

Doc Ruby (173196) | more than 4 years ago | (#30422346)

Imeem might have gotten away with not paying artists for a year because it didn't have the money to pay. Even if the artists sued Imeem, there was no money in Imeem to get.

But now Imeem has money from the MySpace deal. The artists should get it. A single lawsuit should be an open and shut case.

But what Imeem got is said to be "less than $1M", whatever that is. If there's 110,000 unpaid artists, that's under $9 to pay each artist. The best way to use the money taken from Imeem would be to pay to set up other storefronts. Perhaps pay an ecommerce corp to create top-notch MySpace storefronts and promote them on TV/radio/streams/email and social networks.

MySpace has done nothing wrong, has only given some money in a legit purchase of assets from the bad guy that could reboot the artists' businesses. Imeem did wrong, but Imeem turned out to be unable to generate enough money to pay the artists anyway: a failed attempt by the artists to sell, because they bet on Imeem, the wrong horse.

But this could be turned around. However, it's the music business. Therefore I expect it will only get worse.

Re:Imeem Now Has Money to Pay Artists (1)

NormalVisual (565491) | more than 4 years ago | (#30423692)

But now Imeem has money from the MySpace deal. The artists should get it.

Unless there are back taxes due and/or secured creditors that are owed money.

Perspective of a Poor Starving Indie Dude (5, Interesting)

LtCol Burrito (1698596) | more than 4 years ago | (#30422358)

OK, so I'm an "indie" artist, and I have a ton of friends who are indie artists as well. We actually just got signed to a minor record label after years of trying to sell our CDs at gigs, carshows, and chick-fil-a grand opentings, etc. Fortunately, we used iTunes to sell our music instead of imeem. I have to tell you that at .99$ a tune we weren't making a whole lot of $$. In fact, all of my indie friends mentioned above pretty much have full time jobs to pay the bills - the music thing for most of us is something we do just because we love to play.

The point is that I would guess that the imeem accounts are probably just micropayments - maybe in the range of 5-20$. I wouldn't expect any laywer to go after this kind of chump change, not even for a class action suit. I think us poor starving musician types will just have to suck it up as usual while we get hassled by the man.

Re:Perspective of a Poor Starving Indie Dude (1)

vivaelamor (1418031) | more than 4 years ago | (#30422846)

Out of curiosity, how much of the .99$ did you get from iTunes with a minor label?

Re:Perspective of a Poor Starving Indie Dude (1)

LtCol Burrito (1698596) | more than 4 years ago | (#30424814)

Good question. Fortunately, we posted our tunes there before we got signed, so I'm not sure how much the record companies take.

Re:Perspective of a Poor Starving Indie Dude (1)

DaveV1.0 (203135) | more than 4 years ago | (#30425026)

See, that can't be right because everyone knows that artists make all their money from touring and selling merchandise and it is the RIAA and the labels that get all the money from CD sales. That is why it is evil for the RIAA to go after people who share CD tracks. See, none of that money would have gone to the artists anyway, so no one should have to pay for the CD sales. /sarcasm

wtf is an "imeem"? (1)

TropicalCoder (898500) | more than 4 years ago | (#30422606)

What in the hell is an "imeem"? Is it the feminine form of "imam"?

ok all i see are trigger happy comments here (0)

Anonymous Coward | more than 4 years ago | (#30423772)

legal talk, blah blah blah. there are really that many indy artists that AREN'T on myspace? anyone checkout myspace.com/imeem ? i believe in consolidation but not straight communism. and i sure do miss my imeem account. =[

Best streaming alternative to iMeem? (1)

ZipK (1051658) | more than 4 years ago | (#30424812)

I found iMeem an invaluable way to quickly check out new releases I'd read about, or catalog releases by artists. Now that it's gone, what's the best commercial alternative? Who has the best library of streamable music for free or a reasonable monthly fee?

Quick, someone tell Rupert Murdoch (5, Insightful)

metamatic (202216) | more than 4 years ago | (#30425248)

Given Rupert Murdoch's recent comments about copyright thieves stealing content, I'm sure the owner of MySpace will act quickly to ensure that these musicians get the royalties they are owed.

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