Warner cuts free music stream support

Last.fm logo.Warner’s been making a lot of noise with regard to digital media over the past several weeks. First, we had CEO Bronfman complaining about the flexibility offered to ebook publishers. Now he’s decided that the free streaming method of content delivery isn’t working for his label anymore.

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.

Though he’s clearly unhappy with the status quo, he didn’t really define whether he would be pulling existing licenses or simply refraining from signing new ones. It’s also not that he doesn’t like streaming – it’s the free part he’s concerned with. As long as the music is paid for by the listener, Bronfman can rest a happy man.

Source: BBC


Digital music price flexibility resulted in slower sales

iTunes sales slow with price flexibility.Warner Music Group delivered some interesting news in the wake of the Macmillan/Amazon standoff. When Warner was finally given pricing flexibility for its iTunes content last April it kicked off a slow decline in sales growth.

As Warner put things, year to year “digital track equivalent album unit growth” was down from 10 percent in the September quarter to just 5 percent for the December quarter. We can still blame the recession in part, but the decline didn’t begin until prices went up. As Peter Kafka at AllThingsD notes, the digital music business is much more mature than the ebook industry. Also, despite the decline in sales growth, Warner CEO Edgar Bronfman Jr. said the change has been a net positive for his company.

Despite the warnings for publishers in this news, I still think the ebook industry is young enough to pull of the price increase without much negative impact.

Source: AllThingsD