Warner Music, one of the four largest record labels, is upset with just how free their music is online, and they’re not talking about piracy: They’re worried about legit, ad-supported services like Last.fm, Spotify and Pandora. Uh oh.
Warner execs, who were just yesterday lamenting the (shocking!) correlation between raised iTunes prices and decrease sales, are just as uncomfortable with above-ground free services. Says Warner’s Edgar Bronfman Jr, to the BBC:
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.
The free services he’s referring to are only free in the sense that you don’t have to pay upfront for music streaming; they’re not free in that you’re generally being subjected to ads in exchange for listening.
Their problem with services like this seems to be twofold. The first and most obvious problem with a service like Pandora is that their advertising is probably bring in much, much less revenue that a simple digital or physical purchase. The second issue, subtle as it may be, is even more pernicious: to allow services to exist to appear to give away your music at no real cost is to devalue your product, making customers less likely to pay for it in the future. At least, that’s the thinking.
Whether Warner will sever existing agreements or just refuse to enter into new ones remains to be seen, but one thing’s for certain – the music industry is no happier to dismantle their decades-old business model than the the media is. It’s just a shame they’re figuring that out now, just as ad-supported music sites are coming of age, in no small part due to major label support. Business! [BBC]
whatiris
February 11, 2010 at 2:22 PM
Yeah, playing music to people’s devices at no cost is a totally unsustainable business model.
That’s why radio was such an abject failure. At least the labels have learnt their lessons from that one!
Report PermalinkTim F
February 11, 2010 at 2:24 PM
You speak of the ‘music industry’ when in fact we have two of them. While the giants of old fade away, gasping cries of ‘poor us’ with their dieing breaths, I see a vibrant underground industry that becomes less underground and more mainstream every day.
The new players are small, nimble, low budget and embrace the opportunities and challenges the digital landscape provides, often offering a combined free/paid model. (Download a free track here, stream all our tracks on Soundcloud or, “if you like it” buy an album here…)
Despite suggestions that the quality of music would suffer through a low budget model, in my opinion I instead see proof that bucketloads of money are not necessary to make a great album.
A successful album today probably won’t see the massive dollar sales it may have in the past, and we may never again see juggernaut artists like Michael Jackson and Madonna. But what I see in its place is a large number of smaller, more discerning music fans who can engage with their favourite artists on a personal level like never before.
Report Permalinktypedmillepede
February 11, 2010 at 3:07 PM
that’s a complete joke… it’s like saying “o warner won’t let people listen to songs on the radio, coz people listen to that for free” excuse me while i purge all over my computer…
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