Thursday, November 15, 2007

Edgar Bronfman, Jr. Reported to Talk Straight

Edgar Bronfman, Jr.'s efforts to become a powerful figure in the entertainment world, via money derived from his father's Seagram empire, are long-standing. In his latest effort, with Warner Music, he clashed memorably with Steven Jobs over pricing on the iTunes. Jobs' rejoinder that the music industry was greedy may have been directed toward Bronfman personally. Simon Aughton in the UK MacUser blog had a story yesterday that shows Mr. Bronfman has now warmly embraced at least some aspects of Apple's approach. Here is a link, and some excerpts:

The boss of Warner Music has made a rare public confession that the music industry has to take some of the blame for the rise of p2p file sharing. ...

"We used to fool ourselves,' he said. "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."...
Bronfman suggested that mobile companies have much to learn from Apple, despite being critical in the past. "For years now, Warner Music has been offering a choice to consumers at Apple's iTunes store the option to purchase something more than just single tracks, which constitute the mainstay of that store's sales," he explained. "By packaging a full album into a bundle of music with ringtones, videos and other combinations and variation we found products that consumers demonstrably valued and were willing to purchase at premium prices. And guess what? We've sold tons of them. And with Apple's co-operation to make discovering, accessing and purchasing these products even more seamless and intuitive, we'll be offering many, many more of these products going forward." And the iPhone and iPod touch shows that approach can be made to work on mobile platforms, he said, "You need to look no further than Apple's iPhone to see how fast brilliantly written software presented on a beautifully designed device with a spectacular user interface will throw all the accepted notions about pricing, billing platforms and brand loyalty right out the window. And let me remind you, the genesis of the iPhone is the iPod and iTunes - a music device and music service that consumers love." Bronfman appears to be experiencing an epiphany when it comes to digital music. From threatening to withdraw from iTunes and suggesting that to drop DRM would be "without logic or merit", he is now heaping praising on Apple and recently opened a DRM-free section on Warner's own Classics and Jazz music store.
If Mr. Bronfman's remarks indicate that he has accepted flat pricing for single tracks, but also wishes to offer consumers additional choices, including premium offerings and full albums, this would be wonderful news, as is the DRM-free section. Mr. Bronfman's remarks that it was "inadvertent" that the industry went to war with consumers is, however, unlikely to be met with unanimous agreement; some may believe the war is far from over. (see this article on P2PNet about his speech). The industry continues to claim that P2P results in massive losses and then uses those dubious claims to justify ever-greater legislation and intrusive tactics. (See earlier posting here, and the report mentioned in Mr. Dames' comment). Nevertheless, Mr. Bronfman's enthusiasm for Apple's products appears genuine, and his candor about the industry's failures is highly commendable. No industry can afford to be at war with its consumers; innovation is inherently disruptive, and some industries react more quickly than others to adapt with new business models that match consumers' desires. Mr. Bronfman appears to be headed on exactly the right track. Bravo.

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