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Palo Alto, Calif., - November 10, 2008 -
For music labels struggling to survive the move from physical sales to digital sales, it's time to get creative.
Virtual world IMVU Inc. offers one opportunity to the music industry with its new music service, which enables people to buy songs and use them inside and outside of virtual worlds.
Users can buy the songs and make playlists and play them in their rooms within IMVU. They can also play songs in public rooms, in a sort of virtual jukebox. People can also download the songs off of IMVU to play on iPods and other digital music devices. It costs slightly less than $1 to buy a song to play on IMVU and it costs slightly more than $2 for a song that can be played on IMVU and also be downloaded, without digital rights management, to an iPod.
The company has an agreement with the four major music labels to sell the music, as well as with independent distributors, giving it more than 1 million songs in its catalog at launch.
IMVU is already generating about $1 million in revenue per month, 90% of which comes from micro-transactions on virtual goods and 10% of which is advertising-based, said Cary Rosenzweig, chief executive of IMVU.
"In the current economic environment, we believe the micro-transaction model will be very robust," Rosenzweig said. "IMVU with our micro-transaction system is a great value for the dollar."
IMVU raised $11 million in Series C funding led by Bridgescale Partners in April 2007 and an $8 million Series B led by Menlo Ventures and Allegis Capital in 2005.