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November 14, 2007

Warner Music Boss: We Were Wrong

Duncan Riley

36 comments »

edgar-bronfman.jpgSomeone in the music industry finally seeing the error of their ways? A blue moon rose over Macau Wednesday when Chairman and Chief Executive Officer of Warner Music Group Edgar Bronfman admitted on stage that the music industry had been asleep at the wheel.

Bronfman told the audience at the GSMA Mobile Asia Congress that mobile operators should not make the same mistakes that the music industry has:

We used to fool ourselves…We used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding. And of course we were wrong. How were we wrong? By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find and as a result of course, consumers won.

The remarkable thing about Bronfman’s admission is that the music industry considered what they were doing, in trying to limit consumer choice, to be a war. It’s a frank and honest admission that’s a positive for the music industry in moving forward from the sins of the past, however one mans words alone do not herald a sea change in an entire industry. Having said that though it’s still nice to see at least someone has woken up to the realities of today’s marketplace.

(via MacUser)

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Comments

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  1. www.carversation.com

    November 14th, 2007 at 5:24 pm

    ya they were

  2. Mayank Kumar

    November 14th, 2007 at 5:27 pm

    What they have to realize is that DRM kind of solutions disappoint users because they play with sense of ownership or users. Genuine users want to be able to do whatever they can do with songs if they paid for it. But DRM kind of soln. treat them as thieves by default which is wrong.

  3. Chris

    November 14th, 2007 at 5:29 pm

    Is it just me or does the guy look just like House?

    Anyway, it’s good to see these guys finally starting to come around. WAAY too little too late IMO, but good none the less…

  4. Daniel McLaren

    November 14th, 2007 at 5:43 pm

    Yeah, it took them a while but here’s to hoping that the mobile industry doesn’t make the same mistake. I think with an idea like Android on the loose they’re already in better waters.

  5. grammar

    November 14th, 2007 at 5:43 pm

    It’s ‘one _man’s_ words’.

  6. TekWek

    November 14th, 2007 at 5:52 pm

    yeah he does look like House…..and a little bit like cleaned up chuck norris….which makes his every word very important…..

  7. Advice Network

    November 14th, 2007 at 5:55 pm

    That’s pretty brave, but when the rubber hits the road, are they going to do anything differently? I’m not holding my breath.

  8. susan

    November 14th, 2007 at 5:58 pm

    Interesting that Sony BMG UK is only accepting demo tapes via Vox!

  9. EH

    November 14th, 2007 at 6:34 pm

    Of course he doesn’t mention that their customers and various and sundry lawyers were telling them in no uncertain words that they were going down the right path. No, if you ask the Vivendi-waster what went wrong it was just a strategy choice. Well boo-hoo Ed, don’t say nobody warned you.

  10. EH

    November 14th, 2007 at 6:37 pm

    er, “wrong path.”

  11. Bruce Warila

    November 14th, 2007 at 6:41 pm

    I have been rating Warner as Buy for a couple of months. This company has tremendous assets, they just need to learn how to leverage them.
    http://www.unsprungartists.com.....tupid.html

  12. Mitch Reisendorf

    November 14th, 2007 at 6:43 pm

    When your stock is about to fall to $5.00 a share owning up to your failure to embrace online technology a bit easier

  13. Big Bopper

    November 14th, 2007 at 6:45 pm

    Sweet. So what are they DOING about it?

  14. http://www.meetingflex.com/SearchVideo.aspx

    November 14th, 2007 at 6:46 pm

    Right.

    :-)

    Blazing fast video search
    http://www.meetingflex.com/SearchVideo.aspx

  15. AnonTroll

    November 14th, 2007 at 7:17 pm

    Glad the “big man” realizes that they are losing the war. The genie has been let out of the bottle and there is no way to stop file sharing. The smart thing to do now is figure out how to embrace and profit from the technology.

  16. Craig Klein

    November 14th, 2007 at 7:45 pm

    At this late date, this kind of admission just proves that they’re still not caught up with the rest of us.

  17. Mike Abundo

    November 14th, 2007 at 11:16 pm

    I think I just saw a pig fly. Is that a chill I feel in Hell?

  18. david hyman

    November 14th, 2007 at 11:42 pm

    warner is no buy stock. he’s admitting to mistakes but doing nothing about it. that’ the funny part.

    penny per track per stream? what imeem and lalal is paying? that does not enable the market. one has to generate a $10 cpm for every song listened to for break even. not possible!!!!!!!!!!!!

    the rates need to be closer to a $1cpm (1/10th of $.01) for a model to work. until then, they will keep playing bop the mole with perceived infringers.

    this is marketing speak. the one place warner is successful because there is still control is the mobile handset. they are milking it for all it’s worth before the consumers win out and carriers lose control to open handsets.

    when that happens, warner will be scratching their heads wondering what to do now that the cow they’ve been milking is gone. and they will have not prepared ahead of time for such an event.

  19. Misery

    November 15th, 2007 at 12:04 am

    Craig @ 16.

    Exactly my thoughts. I did masters degree almost 10 years ago and people were using Napster and starting to use portable mp3 players. If I was a share holder in any of these companies, I’d be selling quick.

    It’s simply unbelievable how these companies don’t get it. They sit on their content and expect the money to just roll in. And when it starts rolling (trickling) in again via iTunes, they start crying that they don’t have any control. You don’t *deserve* any control. You have failed to innovate. You have failed to effectively leverage your assets. You are business failures. Your corporate structures and systems are not built for the digital age. No customer gives a shit about the label. They only care about the artist. And this lines up nicely with the fact that labels don’t give a shit about the artists.

    Once upon a time, I was working on a digital music venture. For any given artist you would have to tell the label you wanted to distribute their content, then they would have to pay a lawyer to go check the contract… Didn’t these people have anyone capable of throwing together a simple excel file at the very least? It’s not *that* complicated. And then you want marketing money for me to sell your digital content. What’s that about? So I can hold inventory? Out with the old, in with the new.

  20. Alex

    November 15th, 2007 at 12:10 am

    talk is cheap… meanwhile they are still using their pitbull to sue consumers.

  21. Hans VB

    November 15th, 2007 at 2:16 am

    @11 Bruce Warila

    I hope people haven’t been following your buy rating for WMG ‘for the last few months’. The stock price has been dropping significantly over that timespan.
    Hardly making you look like a good stock watcher.

  22. Landon McDowel

    November 15th, 2007 at 2:47 am

    Oddly reminiscent of the “declaration of principles” scene in Jerry Maguire…

  23. Duncan

    November 15th, 2007 at 3:09 am

    He looks like House crossed with Sylar from Heroes…

    This is my take on the story:
    http://www.radio-edit.co.uk/?p=110

  24. Matt Asay

    November 15th, 2007 at 5:58 am

    Actually, I find the last comment quoted in the MacUser article to be indicative of more problems to come. Bronfman thinks he’s innovating by forcing people into the old model of buying songs: one album at a time. He’s found ways to disguise his backsliding on the matter by throwing in a ringtone, but the reality is that people are buying the album because they’re forced to. If not, they’d do what I (and probably many others) do when I actually like an entire album: I buy it, song by song. I like this when it’s an open choice. I don’t when it’s not.

  25. micfo.com

    November 15th, 2007 at 6:09 am

    My feeling is somewhat like Misery, the music industries live on royalty and die on royalty, what music industries are doing to stop piracy and to encourage the budding talents and struggler’s?

  26. Brian

    November 15th, 2007 at 7:21 am

    Yes, you were wrong Edgar. Don’t expect forgiveness until the RIAA is dismantled and its members sent to Monster Island. Don’t worry, it’s just a name.

  27. Moses

    November 15th, 2007 at 7:53 am

    The “objective” press (deliberately or not) ignores the bigger issues at stake for artists if labels falter:

    If the Tech world loses this campaign, they will simply have to pay a bit more for their loss leader item. Since they tend to bundle music with other products this expense will not be felt in any significant way by the consumer. It will just shave the tech industry’s gross a tiny bit to about $87 billion.

    But if art loses this war, that is to say, if record companies/artists lose their ability to control who gets to license their work and at what price, the music business, as we know it, ends. Music itself will suffer as an art form and the Tech-Masters will absorb the labels, bundle their catalogs, and in a few years you’ll buy a lap-top and it will come pre-loaded with an entire Juke Box of Classic Rock, Rap, Jazz, whatever.

    This all sounds great if you’re a consumer, but if you’re a music company you will make only a small licensing fee and your artists and songwriters will see a paltry fraction of this sum. The trickle down effect for studio owners, producers, lawyers, managers, etc, will naturally be devastation.

    As a music professional, if you’re not pissed off, you’re not paying attention.

  28. Bull

    November 15th, 2007 at 10:12 am

    This is advice from the guy who sold the family’s shares of Dupont and Seagram’s, huge money-making businesses, acquired and built over generations, because those businesses were “boring”, then invested all of this money in a stupid convergence play with a sewage treatment company (now with the much sexier name of Vivendi), and lost it all ? Two stupendously bad decisions back-to-back ? This guy, who can’t recognize good business when he sees it, is telling the world about — not how a single business, but — how a whole industry got it wrong ? Laughable. Just ridiculous. There are much better people to listen to.

  29. cana

    November 15th, 2007 at 12:17 pm

    now if they could just do something about the outrageous lawsuits against
    music file sharers.

  30. my music blog

    November 16th, 2007 at 2:27 am

    apology accepted… let’s see what’s your next move!

  31. avgbear

    November 16th, 2007 at 7:46 am

    This epiphany should have occurred 5 years ago.

    “we inadvertently went to war” my ass. I guess by “inadvertently” they mean deliberately suing their consumers.

  32. sommy bawdie

    November 23rd, 2007 at 5:44 am

    awesome

  33. Man

    December 5th, 2007 at 6:52 am

    Music Web!

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