Thursday, 11 February 2010

Warner Music goes backwards!

I was extremely disappointed to hear that Warner Music is going to stop licensing their music to free streaming services. How bizarre!


Bugs Bunny
Originally uploaded by Mreh
The BBC report says: Warner retreats from free music streaming. I think an extended quote would helpfully illustrate their thinking.
"Free streaming services are clearly not net positive for the industry and as far as Warner Music is concerned will not be licensed.

The 'get all your music you want for free, and then maybe with a few bells and whistles we can move you to a premium price' strategy is not the kind of approach to business that we will be supporting in the future."

What approach does he support then? The one that almost drove the record industry into the ground? I thought that the music industry was beginning to get it's head round the way the digital world worked and were at least starting to see the potential in making a little money on each transaction from a lot of music (in the digital world) rather than making a lot of money from a little music (in the world of CDs). I can't make up my mind if they are burying their heads in the sand or running about like headless chickens.

Also, what on earth does "net positive" mean? Is that "net"as in net profits or "net" as in Internet? Either way, the statement doesn't quite make sense to me.

I get a bit more confused as I read down the article. It seems that Edgar Bronfman Jr from Warner music is happier with paid subscription services; it is advertising generated revenue models that he seems to dislike. Is that because with an up front subscription payment, they will get a slice of the money just for making their music available whereas the advertising supported model depends on people actually listening to their music? This is not a rhetorical question. I am genuinely unsclear about why he favours the subscription model (other than because he somehow thinks it will generate more money).

XFM, reporting on the same story said Mr Bronfman, "...doubted their [i.e. free streaming services - DM] ability to provide a sustainable alternative to how the industry works currently." This implies the current business model currently works!

What do you think? Advertising supported music more or less works for radio stations, why wouldn't it work for music streaming?

3 comments:

Jeff said...

I don't find myself streaming a lot of music, as I'm still hung up on the idea of owning my music, whether it's on CD or as a digital download. Still, I like being able to do it if there's something I really want to hear - key word being hear - so that I can determine if I'd like to spend money on it. If Warner doesn't want me hearing their music, that's fine with me - as long as it's fine with them that I don't spend my money on it!

Mosher said...

So are they going to withdraw the right for all commercial radio stations to play their music as well? After all, the only difference between them and streaming media is that their songs appear less frequently and listeners can't *choose* to listen to them.

Take away the means of streaming for free and cash going to WB by advertising and you simply encourage people to go and listen to the tracks elsewhere and by other means.

*looks in the direction of Pirate Bay and uTorrent*

BTW my word verification was "arsorsh" which is *close*...

David said...

Hello Jeff and Mosher

It seems the bizarre that Warner is choosing to prevent people hearing their music. Especially since they are getting money when people listen - albeit a small amount of money, it's still better than nothing... which is what they will get now that they've withdrawn their support.