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August 28 2008

Music Industry Wants More Video Game Money

Edgar Bronfman, Jr is back.

For those unfamiliar with Edgar Bronfman, he is the CEO of Warner Music Group.  Good old Edgar and I have a long history of his amazing comments in that I have written about him numerous times,and I’ll link those as we go.

This time around, the story comes from the Chicago Tribune where Mr. Bronfman was talking about the success of games like Rock Band and Guitar Hero.  These games are built around playing fake instruments to music, and those songs tend to be well known.  While bands have seen an increase in sales for music included in these games, Mr. Bronfman told the Chicago Tribune the following:

“The amount being paid to the industry, even though their games are entirely dependent on the content that we own and control, is far too small,” he said during an earnings call this month.

This is shockingly remiscent of what he said in September 2005 when he thought it would be a good idea for Apple to give music companies a cut of iPod sales because he felt the $.99 price for iTunes songs was artificially low, and everyone knew Steve Jobs couldn’t sell iPods without the licensed music.

Bronfman’s solution? Well, if Apple is “artificially” keeping the price of downloads low to promote sales of iPods (you can debate amongst yourselves whether 99 cents is artificially high or artificially low), then as he sees it, the labels should get to share in those [iPod] revenue streams.

However, back in November of 2007, while at the GSMA Mobile Asia Congress conference, he said:

“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.”

Mind you, that was only 10-months ago he said this, so what changed?  What do I mean?  Again from the Chicago Tribune:

Bronfman suggested that he wanted Warner to be less a supplier than a partner.

“If that does not become the case, as far as Warner Music is concerned, we will not license to those games,” he said.

So, here we are again, in the exact same type situation we were in back in 2005 when he thought it was a good idea to mess with Apple.  So it appears his solution is to threaten the video game makers with totally withholding music from them.  Does he not realize this would mean no realized income from this revenue stream?  This is exactly like the article I wrote the other day about how the industry is killing off music discovery methods over greed, and now here is yet another example of them doing the exact same thing.

When is this industry ever going to learn that their greed is doing nothing but angering the consumers, and they keep killing the golden goose that keeps laying eggs for them.  Sure, they’re making money from Pandora, but not ENOUGH.  Yes, they are making money from Rock Band, but not ENOUGH.

Mr. Bronfman said that the music industry wasn’t evolving as fast as the technology and that needs to change.  So here you have two of the biggest promotional tools going right now, and you are realizing revenue from it, but you may kill it off because it just isn’t enough.  I am sick and tired of the music industry being nothing but story after story of greed.  How they are so put upon, and everyone takes advantage of them, boo-hoo, poor them.

Well, apparently history does repeat itself, because Bronfman is sounding like a broken record.  Let him cut off the games from getting music, and your company can continue to lose money.  Oh, did I forget to mention Warner Music Group suffered a net loss of $9 million last quarter?  Yeah, good idea, threaten to cut off even more money to drive those losses even higher, good thinking!

Before I say good-bye to Mr. Bronfman before his next asinine comment calls me to his shores again like the Sirens of myth, let us not forget this is also the man who gave his kids a ‘talking to’ after he learned they were illegally downloading music.  He never did reveal what their punishment was, but I suspect it had something to do with charging them more money.



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