MySpace-Imeem Deal Leaves Indie Artists Unpaid 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."
That's insolvency (Score:5, Informative)
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).
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 (Score:5, Informative)
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
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(*) I am talking of Spanish Civil Law here, YMMV.
Re:Good indie music? (Score:3, Informative)
Comment removed (Score:2, Informative)
Re:Meet the new boss (Score:1, Informative)
You realize that MySpace is owned by Rupert Murdoch?