Social media site imeem recently announced that it has signed a deal to make Universal’s catalog available for free to its users. With this deal, the San Francisco-based startup now holds rights to digital material from all four major record labels.

The arrangement is a relatively new model for the music industry. Rather than paying per-song royalties to labels, imeem will let users legally upload and stream music and videos while Universal, like the other labels involved, will get a cut of the ad revenue.

There’s no doubt that the iTunes Store is the dominant force when it comes to digital music, and success for imeem doesn't necessarily mean bad news for Apple. In fact, this might be a breakthrough compromise between music labels and listeners: people may listen to music on their PCs for free, but then purchase them from iTunes (or any other online music store) to ensure they can be burned on a CD or played on their portable devices.