Warner Music Group: Anti Free Streaming Services

The Appetizer

Since the rise of the internet, the music industry as we know it has been suffering, largely due to its reluctance to take the development of music downloading seriously when it first appeared to the general public.  They did not make the investment during the early years of digital downloading to develop any form of financial models until the culture had already developed itself.  As a result, by the time the music industry sales started to shift to more towards digital sales instead of the traditional, the music industry as a whole was caught off guard and has been suffering ever since.  This article shows just one of the many examples of the traditional industry vs. the digital industry, as the CEO of Warner Music Group expresses his lack of support in free online streamers such as Spotify and Last.fm in favor of subscription based models (ie- paid for music), and deems the paid models to be the “future”– but is it?

The Main Course

The Dessert

It is interesting to read this knowing the problems that the industry has had in recent years regarding getting people to pay for digital music instead of giving it away for free.  The music industry is at a catch 22 because they need the exposure that the digital platforms offer to help keep themselves  and artists relevant to listeners.  At the same time, however, since there are so many outlets, it requires them (the record labels) to have a vast amount of music, particularly from their popular or rising artists, available on a regular basis in order to keep their listeners enticed without making their listeners exhausted of that particular performer.  The flipside of this is that to produce that music, it cost money (not including the development and promotion of the performer),  therefore their expenses increase, yet their means of generating revenue, has decreased (in their opinion since they rely on traditional methods).  Not including the fact that many artists are finding success without major label support thanks to the digital age.  As a result, the major labels have a point– but that is only because they are still thinking in a box.  The comment above mentioning that the future of music online is paid subscription does not seem very feasible considering that one of the primary reasons the internet is such a popular outlet is because of its ability to offer so much FREE material.  Remember the popularity of Napster before it became a paid service in comparison to how popular it is now?  The problem is very simple, the traditional labels are still trying to rely on traditional, standardized models instead of really understanding what type of opportunities the digital medium offers for them to generate revenue. The reality is if proper R&D was performed on this dynamic, the labels would find that they could quite possibly, in fact, generate more revenue through the digital evolution than they did in the traditional, however, they have to be open to it.  In addition,, they have to accept the fact that the foundation has already been laid in terms of the standard and future of online streaming, and that they need to work with it instead of fight it if they really want to come out on top instead of staying in the hole.

The Overall Meal

2 Stars!

The Doggybag

So what do you think– is the future of online streaming really paid subscription– or will free online streaming prevail and continue to dominate?

Let the debate begin (below)!

2 thoughts on “Warner Music Group: Anti Free Streaming Services

  1. I must admit that that is one wonderful insight. It surely gives a company the opportunity to get in on the ground floor and really take part in creating something special and also tailored to their requirements.

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