Together Again: Warner Re-Connects With Imeem

It was only a few weeks ago that Warner Music ditched its investment in Imeem, but with a little time to digest the break-up, looks like those two crazy, media kids might actually make this thing work.

According to Peter Kafka at All Things Digital, Warner Music Group has once again reached out to the social music service. Only the second time around Warner Music will not be throwing any money at the music start-up, converse to the $16 million they already invested in Imeem back in ’08, plus another $4 million in debt.

For Warner’s round 2 with Imeem, Kafka writes:

…Warner will get more equity in Imeem in exchange for a renegotiated licensing deal that is supposed to 1) give Imeem a better chance of being able to pay Warner for use of its music and 2) reduce the amount of cash Imeem does pay out to Warner every quarter.

Warner also walked away from its $20 million investment in lala.com, so undoubtedly the $33 million write-down for the two digital start-ups has made the mega music company wiser to any forthcoming digital music deals.

One could wonder why Warner Music should double-back to Imeem, but by not having to write any checks for the music service, the risk is minimal for Warner, if there’s any risk at all.

I’m in agreement with Kafka, who says:

Instead of throwing good money after bad, Warner only has to give it access to its digital music catalog, which doesn’t cost the company a cent, and won’t show up on its books. Best case scenario: Imeem survives and Warner’s stake is worth something again some day.

Maybe version 2 of Imeem and Warner Music will have a happy ending.