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Unlike broadcast television, which relies solely on advertising, cable networks have another revenue stream: fees paid by cable operators.
If it works, the next step is the fall of per-stream fees and download fees.
Turntable pays per-stream fees just like Pandora or other "Internet radio" services.
It appears that imeem had simply stopped paying those per-stream fees, which would explain the $4 million in bad debt.
Now that the media companies will continue to own Hulu, they kind of have a fiduciary responsibility not to ream it too much on those streaming fees.
They include: the distributional assumptions for the click-through rate; sponsored keyword advertising slot valuation over time; participation and click-stream fees and the role of a two-part tariff; alternative advertiser bidding strategies; and the design goals of sponsored keyword advertising slot auctions.
But all that popularity comes at a price – billions of free streaming songs are costing MySpace up to $10 million a month in streaming fees, says a source, and the joint venture may lose $20 million or more this year.
The one company who had such a personal cloud license is the now defunct Lala who had to agree to no downloads whatsoever, no mobile stream (web browser only) and costly per song stream fees.
At the same time, institute a new set of streaming fees that start at twenty five percent of revenue and decline to five percent over the next 10 years and remain there.
But what isn't known is if MySpace has a special deal with the labels that lets them avoid paying per-stream fees for songs like everyone else does.
They say artists will get a bigger slice of revenue from the streaming fees, and that the music itself will be streamed at higher fidelity.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com