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Warner Music - confused messages on streaming services
Friday 12 February 2010 10:48:22 by Andrew Ferguson

Interpreting what is said by chief executives once comments have been cropped and chopped by the media is always difficult, so one day we get headlines such as "Warner retreats from free music streaming", followed by Warner "won't pull out of free music streaming" the following day.

"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."

Warner Music’s chief executive, Edgar Bronfman Jr

The reality appears that it is linked to contract negotiations for launching Spotify in the US with the UK model of an advertising based free service, and a premier subscription ad-free service. The £9.99 service in the UK effectively gives you access to a massive music catalogue, without being reliant on the playlists that result in radio stations playing the same thirty to forty tracks all day, all week.

It is thought that less than 10% of the Spotify audience subscribes to the premium package, and it may well be the case that advertising income has suffered from the economic downturn just as it has affected many other media outlets. To give some idea of the impact of Spotify though, for the Universal Music Group International the streaming service was the fourth largest generator of revenue from digital sources in 2009.

To have what seem conflicting points put forward by significant players in the music industry does not bode well for their collective success in a digital economy. While broadband can be said to have been highly disruptive, the music industry has had ten years or so to adapt. Perhaps what we are seeing is actually a battle of the establishment against new overwhelming forces, not unlike the original rise of youth oriented radio in the 1960's. Todays file sharing systems can in some ways be compared to the old pirate radio stations of old - perhaps nothing changes.

Comments

Posted by whatever2 over 7 years ago
"To give some idea of the impact of Spotify though, for the Universal Music Group International the streaming service was the fourth largest generator of revenue from digital sources in 2009."

That doesn't give any idea of the impact. It could be the other revenue streams far exceed it, or there are only 4, or that it could be tiny, but the 4th.
Posted by andrew (Favicon staff member) over 7 years ago
Following through on the links things like iTunes and YouTube are thought to figure higher.

If the music industry does not embrace embryonic legal consumption forms then I think we can guess what will happen.
Posted by whatever2 over 7 years ago
Sure, but that still doesn't specify the impact Spotify is having. It would help to have actual numbers :)
Posted by otester over 7 years ago
@andrew

With ACTA in the works worldwide, I wouldn't be too sure about that.
Posted by Rroff over 7 years ago
If ACTA does come into effect... they've taken what is a civil matter into the realm of a criminal one... in which case we might as well throw out law wholesale - all that matters any more is who has the biggest club.
Posted by chrysalis over 7 years ago
How does one get an account on spotify?
Posted by bluetroll over 7 years ago
@ chrysalis
For a free account, you have to get an invite off a premium member these days. Alternatively, sign up for the premium version. ;-)
Posted by chrysalis over 7 years ago
I would signup if I could trial it free first, they lost a potential customer.
Posted by Fixer109 over 7 years ago
Following the comment by Chrysalis this is the big problem with the media industry as whole.

Any other Company will refund you if you are dissatisfied with their product. Not the Media industry and this has caused file sharing to grow as big as it is.
Posted by mattbibby over 7 years ago
When Warner finally realise the media industry is no longer as lucrative as it once was and accepts that no one will ever pay the past rates for media content the better.

Alot of industries have had to accept the revenue decreases in there sector I don't know why the media industry can't either.

They can't dictate how much we pay, it's all supply and demand.

If that means they join the ranks of the rest of the companies not making BILLIONS anymore than so be it and the artists might for once be on somewhere near normal salaries.
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