Warner to Pull Out of Spotify
There has been an interesting development from Warner music who appear to be about to stop their music being streamed for free on the likes of We7, Last.fm and Spotify. What will be interesting to see is whether they are alone in making this move or if other labels will follow suit pulling all of their music or even just certain artists.
The economics for record labels obviously aren’t stacking up for Warner and the ‘freemium’ model isn’t delivering the sort of revenue they were hoping for and this must also highlight some of the pressures of streaming costs on the music services as well.
It seems the record labels are yet to find a way to regain even a small percentage of the perceived lost revenue by illegal downloading and with the mounting losses and debts could it be that 2010 could start the decade with the biggest shake up ever to the music industry and one of the big labels goes into administration or worse? Surely they can not continue losing money as they are forever?
http://news.bbc.co.uk/1/hi/entertainment/8507885.stm
February 11th, 2010 at 11:48 am
I think pulling out of the ‘free’ market may be more damaging in the long term. Unless all the other record labels do so their artists will just cease to be relevant as no-one will hear them.
February 11th, 2010 at 11:54 am
It seems to me that Warner is having dificulty adjusting to the changing marketplace in realizing that it is no longer selling the music that can make them money but instead will need to reinvent themselves and a new model for revenue. Free music will continue long after Warner pulls out. Remember what they were saying after Napster was shut down….free music will live on.
February 11th, 2010 at 12:14 pm
It wouldn’t surprise me if Warner launched their own ‘freemuim’ service in which they could charge for subscriptions etc. Either this or an itunes style service where they can charge what ever they wanted.
I think the problem for the music industry stems from a very short term “make money at all costs” view.