The music industry has taken another beating in the blogosphere over the last 24 hours after the head of Warner Music lashed out against online music streaming services such as Spotify and We7.
“Free streaming services are clearly not net positive for the industry, and, as far as Warner Music is concerned, will not be licensed,” Edgar Bronfman Jr, Warner Music’s chairman, said on the major label’s analyst call yesterday.
“The sort of ‘Get all of the music you want for free and then, with a few bells and whistles, maybe we can move you to a premium price’ strategy is not the kind of approach to business we’ll be supporting in the future.”
Bronfman’s comments tally with what the FT has previously reported: that some labels remain cool on Spotify’s plans for a US launch. Spotify has been more open about its subscriber numbers recently, revealing at Midem that it has 250,000 paying customers – perhaps to help fend off such criticism.
But it’s worth remembering that this isn’t the first time Warner has played fickle with music sites. It is still holding back from Google’s Vevo music video site and removed its videos from YouTube for almost a year.
A spat between the label and Last.fm in 2008 led to the CBS-owned music community pulling Warner artists’ tracks from its streaming service. At the time, those involved with those negotiations said that Bronfman’s attitude was instrumental to that decision – and that his concerns were financial, not ideological.
Other labels haven’t scrambled to support Warner’s stance today. Universal’s incoming co-chief executive Lucian Grainge said that new technology such as Spotify was “one of the great opportunities in this next cycle”.
The dilemma for online services, from Last.fm to Spotify, is whether they can afford to stump up enough cash to win the most sceptical labels over. The alternative is to launch without them, and hope to gain enough momentum that the refuseniks eventually come crawling back.
Update: After this blog was posted, Spotify sent a statement. “We would like to make it very clear that WMG is not pulling out of its current agreement with Spotify in Europe,” it said. A Warner spokesman confirmed that all its current deals with streaming partners will remain in place but refused to comment on future negotiations.
