The Stoopidity of Warner Music

It’s hard to believe that an established record label could be – to use a term we made famous in Philadelphia -- so stoopid!

I don’t mean to disparage any individual here, but to comment on what looks to me to be a real bad business plan for Warner Music.

And knowing the lemmings in the music industry, I would expect at least one of the other big four labels to catch Warner’s Disease.

Edgar Bronfman, Jr is claiming Warner Music Group is making money and if so, it is not due to anything he has done. If I am a shareholder, I’m either taking an Ambien and joining Rip Van Winkle or I’m selling.

Let’s dissect Bronfman’s Folly:

Against Free Streaming

That means Spotify and every other free streamer hoping to get consumers to pay monthly fees in return for all the music they can consume – and eventually on a cloud without having to wait for it to download.

Bronfman doesn’t bother to address the issues of whether Warner is going to try and get out of its existing free streaming licensing agreements or just wait for them to expire. He also doesn’t address the Lala inspired initiative that Apple is said to be working on.

The labels hate Apple and its CEO Steve Jobs.

Forget the consumer.

This is personal.

For Making ISPs Their Toll Collector

Like other label execs, Bronfman can’t get beyond the model that would have your ISP charge you a monthly fee to license all the music you don’t even want to hear. The only people this plan works for are the big four label execs.

Ever try to get hundreds of Internet Service Providers to agree on anything?

It’s like trying to get the big four labels to agree to even one thing. It isn’t going to happen. And neither is bundling this music into a mobile device.

Nonetheless, this is a major record exec with his head up in a cloud -- the wrong cloud.

Bronfman is one of the reasons there is so much piracy. Who wants to pay monthly fees – unless it is part of a cool Apple system, but then again you already know how he feels about Apple.

For Warner Monetizing Its Acts

That’s why he’s against VEVO which Universal is embracing (told you these guys can’t agree on anything except suing consumers). Bronfman wants to sell his bands' music and that’s just ducky – except, that’s not how consumers work.

Why buy the cow when you can get the milk for free – so to speak.

Against Cherry Picking

Looks like the music industry has to get rid of all these old guys who still think they can sell entire albums in a consumer world that only wants what they want when they want it.

Just because they could force baby boomers and Gen Xers to buy entire albums for one or two cuts doesn’t mean Gen Y is that foolish. In fact, Gen Y buys Lady GaGa when GaGa entices them and not before. Otherwise, they cherry pick.

Looks like Bronfman is in for a big disappointment.

What is scary is that Warner makes the most money from digital of all the labels and look how their CEO is seeing the future. He either doesn’t mean it or doesn’t get it.

For 360 Deals on the Cheap

So what did you expect? A label that will pay artists what they deserve? That ain’t gonna happen. As I have said in the past, it is the labels who put artists in the poorhouse, not consumers stealing music.

Bronfman dearly wants 360 deals where they in effect get a piece of everything – now follow this – but they don’t want to pay crazy money to sign them. And there you have the problem. Why should artists do 360 deals with labels that – if you’ll pardon me – aren’t really that good at – well, doing 360 deals?

I’d hire GaGa first. I’m only half kidding.

If an artist goes with Warner, they get screwed (surprise/surprise).

They could agree to do a set number of albums for the label but the 360 money and all the merch could extend beyond the album stipulation.

For Labels Not Managers

Bronfman sees Live Nation and Ticketmaster as being in different businesses than record labels.

But wait.

Why do you need a record label if these venue operators can handle everything else?

Look, Live Nation is reaping the results of its own stupidity (not just the recession) therefore, neither the labels nor touring companies look very smart right now.

For a Warner-EMI Merger

I hope he gets it. Then two clueless labels will be one. And neither will be relevant beyond any interest in their catalog.

When has the music industry gone on a discovery binge – instead, they cutback expenses and staff?

When has the music industry offered a legal alternative to iTunes that had any heft other than moan about having to sell the cuts consumers want – when they feel like paying?

So here we are – ten years after the labels got taken by Napster and blindsided by Apple and they still look stoopid.

Against free streaming when Apple is about to get into that business with or without them.

Against file sharing which is the new radio -- that’s the music discovery replacement for djs and stations.

Against fair deals with bands and acts --- without even acknowledging that labels are not really good at 360 and acts don’t really need them.

Against motherhood.

Okay, I lied. But they are against anything consumers want and technology can give them and that's almost as sacred as motherhood in the music industry.

Music is one of the few things people cannot live without. How do you screw up the music business?

Ask Edgar Bronfman.

He’ll tell you.

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In the February 16th post, “Why Radio Will Only Be an $8 Billion Business by 2016,” there were several references to BIA/Kelsey data and a reproducing of a BIA/Kelsey chart. To set the record straight, BIA/Kelsey projects radio industry revenues of $14.6 billion from the over the air advertising sales and an additional $749 million in online sales in 2013. At this point in time, BIA/Kelsey does not have an estimate for radio industry revenues for 2016. Additionally, the projection lines included in the chart are those of mobile industry sources, not BIA/Kelsey projections. I appreciate BIA helping to set the record straight. While BIA/Kelsey does not project more than five years out, I agree with mobile execs who believe on the present path radio will be an $8 billion business by 2016. Sorry for any misunderstandings. I wanted you to have all the facts.