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?
