Breaking the Law To Get a Break: Social Site Partners With Music Label That Sued It

For many music-oriented Web start-ups, a copyright lawsuit can be a death sentence. But for Imeem, getting sued by one of the biggest record labels played a pivotal role in its success.In May, Warner Music Group sued the social network, saying that it allowed millions of people to share Warner artists’ music and video content without permission. It sought up to $150,000 in damages for every unlicensed song or video posted on the Imeem site.Two months later, Warner executives changed their tune. They scrapped the lawsuit, invested in the company, and struck a deal to make its entire catalog available to Imeem’s growing number of members for free — to stream, not download — in exchange for a cut of the site’s advertising revenue.

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