Apparently Warner Music are planning on not licensing any of their artist’s music to new streaming sites similar to Spotify and Last.FM.
Edgar Bronfman Jr, chief executive of Warner Music, has stated that streaming services such as the aforementioned ones are “clearly not positive” for the music industry.
If I’m to understand correctly the workings of those services, they provide the labels with revenue based on play counts, with the money usually generated from ads (or subscription fees in the case of Last.FM, but let’s stick with the idea of most of these services being free, like Grooveshark or Pandora). Correct me if I’m wrong, but surely in this age where labels are still fighting the war on illegal downloading, some revenue garnered through these streaming services would be better than no revenue at all.
“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.”
Although, it does seem at this point that Spotify and other established services are safe, and that Warner Music’s stance will only be upheld for any possible deals in the future.
Bronfman believes that it would be more beneficial to establish a subscription-based service unique to Warner Music and their artists. He also believes that the number of potential users of this kind of model would “dwarf” the number of people who buy music from stores like iTunes.
HAHAHA, oh wow. You’ve gotta be kidding me. Congratulations Warner Music. Another stellar move aimed at building a sustainable business model for the music “industry” in this digital age. Really, you’re making leaps and bounds.
Let’s be honest. If people can’t stream this music for free on sites like Grooveshark (or newer sites, as it seems only they will be affected), if Warner Music expect people to pay a subscription fee to stream music, over buying it digitally online, they have another thing coming. Even buying from iTunes is preferable to paying a set fee to stream music. If you own it you can put it on an iPod or mp3 player. You can listen to it whenever you want. Nobody wants to waste their internet connection and bandwidth on streaming copious amounts of music, especially when at the end of the day, they don’t even own the songs. And let’s not forget, if people don’t want to download from iTunes and pay for it, they’ll just download it illegally anyway. Simple as that.
Free streaming services at least provide some form of revenue to the labels, why not keep it that way? To be honest I don’t think the suggested alternatives are viable at all.
EDIT: Found some more comments to address.
Bronfman claims that “Hundreds of millions if not billions of people, most of whom are not today either buyers or certainly heavy buyers of music” could possible be attracted to this kind of subscription streaming service. And in the long term, it would be more profitable than pay per-track downloads.
He makes an alright point, though not without it’s flaws. If there are casual listeners of music out there, I’m more inclined to think that it’s those people that will want things for free instead. Those people may not put much thought into supporting artists. Though this is just my opinion, I know that as someone who loves listening to music, supporting my favourite artists is important to me. I feel I owe it to them. I’m not entirely convinced that the very casual music listener thinks this way. Though it’s possible such a service could reach a niche audience who aren’t concerned with the portability of their music, or literally having a copy of the song.
Interestingly enough, it seems Universal have a different view about services like Spotify.
“Spotify is a very sustainable financial model – full stop,” – Rob Wells, senior vice president of Universal Music Group International.
It’s appearing quite unlikely that the other major labels will follow Warner Music in it’s position of withdrawing future licensing.
I’d like to quote Jon Webster, chief executive of the UK’s Music Managers’ Forum, who seems to be exactly right, in my view.
“Anything that’s going backwards is denying where the world’s going.
“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.
“There are new business models out there and they are beginning to work and we are in a transition phase.”
He is absolutely correct. People want things now, and to go backwards like this is a big mistake.
I think that although this is a transition phase, but I’m not entirely sure where it’s going. I think even if streaming services are turned into lucrative business models (which would be great), that people are still going to want to use ipods and mp3 players, and that people will still download music illegally, unless some other model is adapted. A model involving free major label music. Because that’s ultimately what people want.