Warner Bails on Streaming Sites

Warner Music has decided against licensing new music to online streaming sites like Last.FM, Pandora and others. Citing his belief that these sites, which deliver his artists’ music to untold potential new fans, was not “positive” for the music industry, chief executive Edgar Bronfman Jr. told the BBC that Warner would not issue licenses to new sites.

“Free streaming services are clearly not net positive for the industry and as far as Warner Music is concerned will not be licensed,” Bronfman told the BBC. “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.”

Instead, Bronfman said Warner will focus on launching their own fee-based service to compete with streaming sites and online retailers like iTunes.

“The number of potential subscribers dwarfs the number of people who are actually purchasing music on iTunes,” Bronfman said. He sees the potential for subscriptions in the “hundreds of millions if not billions of people, most of whom are not today either buyers or certainly heavy buyers of music.”

Yeah, right. Good luck with that.

Other majors aren’t so sure and seem to be taking a wait-and-see approach.

Rob Wells, senior vice president of Universal Music Group International, recently said that Europe’s popular streaming service Spotify had a “a very sustainable financial model.” Spotify is in negotiations with labels to launch in the US.

You would think that the majors would support anything that kept fans from piracy, as Jon Webster, chief executive of the UK’s Music Managers’ Forum, which represents artist managers, said.

“New media has to give the consumer what they want and the consumer is in a world where they want things right here, right now – and if you don’t give it to them, they’ll steal it,” said Webster.

It’s debatable whether filesharing is “stealing” but it’s clear that at almost every opportunity, the major labels have made the dumb move against innovation. I’m wondering if WMG will even live to see the error of their ways?


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14 thoughts on “Warner Bails on Streaming Sites”

  1. Yeah, because all those people who aren’t buying music right now are sure to pay for one major’s offerings. This is bound to work!

  2. Maybe it’s because the major labels’ approach to embracing new technologies has been deplorable in the last decade, but I’m surprised they haven’t implemented their own exclusive digital-based retail service to undercut iTunes, et al. I mean, what was to stop WB, for instance, to offer an equivalent store where you could get their catalog and nowhere else? (Which could include the out-of-print stuff, as well.)

  3. Because, Kiko, that would kind of make sense. Even if they did something like that, you could be sure their out of print stuff wouldn’t be included, because fuck you, that’s why.

    I swear, I don’t understand how these people keep their jobs.

  4. I was totally surprised that Lefsetz didn’t just beat this down like he normally does on major label blunders. And make no mistake: this is a major label blunder. It looks like they’re placing bets that ISP licensing will provide them more revenue options than streaming. They’re probably right, and we’ll probably see our ISP rates increase because of it. He saved his fervor for the new CEO of Universal, who sounds like an even bigger moron. Classic quote: “I believe CDs outlast me as a format.” Only Murph has outlasted me as a supporter of the CD format, but I don’t think there’s anyone here who truly believes that the CD is going to be around for much longer. So how embarassing is it when the only one who fails to understand this just happens to be the newly appointed head of Universal? Like Shecks said, I don’t know how these people keep their jobs. Oh yeah, the Universal moron also supports continued legal action against people who illegally download music. If you’re busted three times for illegally downloading music, you lose your internet. connection.

  5. A few things:

    – I’m not saying CDs will be around for years to come but what will artists–primarily the up and coming ones–sell at shows? Download cards? (It’s not a rhetorical question, btw.)

    – Executive positions at major record companies are akin to musical chairs; it seems like once you’ve been indoctrinated in their ways you’ll always have a gig.

    – I hate to be the clueless old fart that continually brings this up but, what should the penalty be for people who download illegally? None? (“Good job; carry on.“) I pay for mine, damn it. And why is recorded music–a product–held to a different standard? I mean, that free shit wouldn’t fly at A&P with the mac and cheese, right?

  6. People who download illegally should be forced to pay for every single song found on their hard drive or media device…even the crappy ones they didn’t really care about.

    Recorded music is held to a different standard because you don’t have to stuff it down your pants when sneaking out of the store.

  7. Yeah, except they’re suing people for ridiculous amounts, like 2K per song.

    They do that to send us a message. The message is: downloading music is a worse crime than assault and battery.

  8. Don’t get me wrong, I’m not sticking up for the RIAA. I’m sticking up for an alternate-universe RIAA that isn’t run by self-destructive morons.

  9. Technicality: no one has ever gotten in trouble for downloading. The lawsuits are all against people for uploading/making available. A small point but an important one.

    What should be done to downloaders? Embrace them as fans and market to them and sell them things they’d be willing to pay for.

    As for the majors setting up their own shops: they’ve tried it. Remember SonyConnect? It sucked. Nobody wants the shit they’re selling: crappy files that won’t play on your iPod.

    If they were to sell straight mp3s cheaper than iTunes or amazon, then maybe somebody would buy them. But you KNOW that’s not what they’ll do.

  10. Man, go on vacation to NJ for the weekend, and be branded GloNo’s biggest Luddite? Don’t get me wrong; my love of the CD is purely because a viable replacement hasn’t come down the pike. CDs made a fine replacement for records, 8-tracks, and cassettes. MP3s (or whichever flavor of lossy file you wanna peddle) ain’t cutting it for me. And dammit, I’m gonna miss physical media and cover artwork.

    But yes, the CD is dying.

  11. “What should be done to downloaders? “Embrace them as fans and market to them and sell them things they’d be willing to pay for.”

    We’re talking about a lot of people who currently take something for free, even though they know the musicians who made it would have liked to be paid. How do you market to that? An honestly, why not demand to be paid for it, rather than trying to placate them?

  12. Well, it gets into a matter of moral indignation vs. realistic pragmatism. Sure, you can preach and rail against downloaders all day long and do nothing to stem downloading and instead alienate kids you might otherwise convert to paying fans. Or you can embrace reality and understand that from an artist’s standpoint the real money was rarely in selling albums or CDs anyways. I’d save the indignation for the shitty contracts most of these bands sign.

    Why any artist would give a shit whether people are downloading music is beyond me. They should want that shit in as many hands as possible and then tour like mad.

    I attended a forum recently where top tier PR folks said they actually get worried when their clients’ albums don’t leak because that means nobody cares.

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