Warner Music CEO Says War With Consumers Was Wrong

l2718 writes "Edgar Bronfman, CEO of the Warner Music Group, has publicly framed the music industry's failure to accommodate file-sharing as an 'inadvertent' war on consumers. I'm left wondering how you can file a series of lawsuits inadvertently. 'We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding ... By ... 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.'"

Comments

Put your money where your mouth is, Ed.

[croddy]

Put you money where your mouth is, Eddie boy. If these lawsuits offend you as you claim, dissolve your membership in the conspiracy that organizes them. As long as you're still a member of the RIAA, and as long as the lawsuits keep coming, your comments are just as dishonest as your corrput business model.

So please... don't beat me with both fists while apologizing between blows. The beating still hurts and your "apology" just adds insult to injury.

Re:Put your money where your mouth is, Ed.

[Arabani]

Eh, give him some time. It took him 5 years between "inadvertently" starting this "war against consumers" and admitting it was a bad decision. At that "glacial pace", I'd be pleasantly impressed if he called off the whole affair before 2012!

Re:Put your money where your mouth is, Ed.

[east coast]

You're drinking his kool-aid. You're making the same mistake I've seen in tons of other posts on this matter: Thinking that the RIAA is just some autonomous organization. They fact is that they're the customers of the labels too. Maybe early on the RIAA could have sold them a false bill of goods but to act like they're [the record labels] unwitting gimps this late in the game is an insult to those who know what the true relationship between these entities is.

Maybe if they can keep you pointing the fingers at the RIAA they think they're going to buy time and customer loyalty.

Re:Put your money where your mouth is, Ed.

[purpledinoz]

That might be the funniest piece of BS I've read in a long time. A war was inadvertently started against the consumers, just like Hitler inadvertently started WWII.

Re:Put your money where your mouth is, Ed.

[courseofhumanevents]

I propose we suspend Godwin's law for all future articles regarding the music industry.

Re: Put your money where your mouth is, Ed.

[sm62704]

Is this Eddie the Shipboard Computer, or Eddie Munster? At any rate, here's a message to Eddie:

Look, dude, you're glass. We see right through you and we're going to break you if you don't get the hell out of our way, and if you don't break yourself first.

We know you know that MP3s should be advertising for CDs. We also know that what you're afraid of isn't people downloading Lars and Gene's stuff, it's downloading your independant competitors' stuff. You control the FREE radio and you know it. You can't control the internet and you know it.

You're shaking in your boots over Radiohead. I'm afraid it's too late; you're cracked. It's too late, but I'll tell you what you should have done.

When Napster, the old Napster you bozos sued out of existance came along, you should have embraced it. You should have flooded it with 56k samples of every tune in your inventory, and gone on a PR blitz telling everyone how superior the CD was to MP3. It worked against vinyl when the CD first came out, despite the fact that there are pros and cons to CD and vinyl (each has its shortcomings), it would surely work with CD vs. MP3 and CD's vastly superior sound.

You blew it.

You no longer matter. A musician no longer needs an expensive studio and even more expensive factory, he can rent a studio even in a small city like Springfield, which has several. He can get his CD professionally mastered and copied with insert and jewell case for a couple thousand bucks, less than the price of a decent drum kit.

Now your only recourse to stay alive is to be a hitmaker.

You're stupid, Eddie, and I'll be glad when your twitching corpse stops kicking over the china and bleeding all over my government. Die, damn you, die, you worthles scumbag!

-mcgrew

Re:Put your money where your mouth is, Ed.

[flyingsquid]

That might be the funniest piece of BS I've read in a long time. A war was inadvertently started against the consumers, just like Hitler inadvertently started WWII.

You're seriously comparing the Third Reich to the RIAA? I think you're being a little harsh on the Germans there.

Inadvertent post

[noidentity]

Sorry, I inadvertently just made this post and hit Submit.

Re:Inadvertent post

[ROMRIX]

Sorry, I inadvertently just made this post and hit Submit.

Yes, and now I have inadvertently replied to your post but only after deliberating with a team of attorneys to find the best way to bring legal action to stop these inadvertent posts from being viewed inadvertently.

Re:Inadvertent post

[MightyYar]

As he does everyday, he booted up his computer, checked his email, and then HIT THE CAPS LOCK KEY TO HUNT-AND-PECK HIS DAILY EMAILS IN ALL CAPS. PROBLEM IS, HE HIT THE "SUE" BUTTON INSTEAD OF "CAPS LOCK". he was wondering why everything came out in lower case that day...

Truthfully

[Macthorpe]

Two words sum this up:

consumers won If consumers got what they wanted at your expense, it does seem fairly logical that you buggered the whole thing up.

Disposable income not piracy is behind falls.

[Ckwop]

How can you ever win a war against your own customers? If you fight them, they don't pay you and you die. How did they ever expect to win?

I think the reason they haven't made as much money recently has little to do with piracy and everything to do with the changing perception of value. Personally, I think that the value per pound spent on an album compared to something like Halo 3 is vastly different. Halo 3 at the £40 it costs is at least ten times the value to me than the equivalent number of albums I could buy for that price.

There is only a limited number of areas I can spend my disposable income. Between, Halo, the X-box 360 to play it, the iPod, iPhone there just isn't room for such an overpriced product.

And that's why I haven't bought a single CD since 1999 - and I imagine I'm not alone. That's why the music industry is shrinking. They expect to be paid rather than realising they're competing for our money just like everyone else.

Simon.

Re:Disposable income not piracy is behind falls.

[moderatorrater]

This is definitely off topic, but I was thinking the exact opposite. I have a large DVD and game collection that I hardly ever use. I figure I've gotten maybe 5 hours of enjoyment per DVD (some more, some less) and maybe 10-20 out of an average game. On the flip side, each song that I buy from itunes at $1 each have gotten played at least 20x. That's over $1 / hour of enjoyment for music as opposed to $3-$4 for a dvd and $.50-$6 for a game. If I buy a whole album, it usually gets the same amount or more play than the songs i buy a la carte, which usually leads to a higher value over time.

It's a rare movie or game that gets played more than 2 or 3 times for me, but it's even more rare for me to have a song that doesn't get played at least 10x. From what I've read and seen, this is the case for most people.

Re:Disposable income not piracy is behind falls.

[bentcd]

How can you ever win a war against your own customers? If you fight them, they don't pay you and you die. How did they ever expect to win? I suspect that the record companies considered the group of pirates (that they wanted to squish) to not overlap much with the group of paying customers (that they technically want to woo). They went aggressively after the pirates, and it's taken them this long to realise that there is, in fact, considerable overlap between the two groups and that in squishing the pirates, they simultaneously enraged their paying customers. Well, now their disgruntled former paying customers.

Re:Disposable income not piracy is behind falls.

[MightyMartian]

I agree. I think, in part, the record industry has so saturated the popular music market with crap that the talented new artists simply sink into a sea of unmitigated mediocrity. People get upset when I wax nostalgic about the 1960s and the 1970s, but let's face it, a very large part of the music we consider classic rock and pop was recorded during that period. Even into the 1980s you had hit makers like Michael Jackson who had real talent. Compare that with the vaguely homoerotic boy bands and way-too-sexualized teen female acts like Britney Spears that started showing up in the late 1990s, and you have to conclude that somewhere in that period the music industry lost its way, and become a classic economics widget manufacturer, run by people who didn't care about music, bet everything on marketing deals and focus groups (isn't the various Idol shows to be found in North America and abroad the ultimate expression of that). You get the feeling that these guys don't listen to the music they're foisting on the public.

As to Gene Simmons bitching on another /. article today, well, he's one of the creators of the music marketing machine we see now. His descendants aren't guys like Metallica or Nirvana, but Hillary Duff and the Spice Girls.

Re:Disposable income not piracy is behind falls.

[Chosen Reject]

When you watch a movie, that is usually all you are doing (and if not, please don't watch it with me). When you play a game, that is usually all you are doing. However, music is typically background stuff. So you might have played that song 20x, but did you play it 20x doing nothing but pondering its beats and rhythms, mulling over the meaning of the message? Probably not. Most likely it just made your drive to the store not so quiet, or it blocked the noise of your computer while you surfed the web. Perhaps it enhanced the mode during your dinner. As an example, iTunes says that I've listened to Still Alive (from Portal) over 200 times, but I was really paying attention to the code I was writing. Unless at a concert, music is rarely on the center stage of what you are doing.

But even that is missing the underlying point. Time is a really lousy measure of enjoyment. That's saying that any 2 hour movie is just as enjoyable as any other 2 hour movie. If I listen to music for three hours, is that exactly as enjoyable as three hours of a Lord of the Rings movie? Is that as enjoyable as playing through Portal? Maybe, depends on what you find enjoyable. But that is a big dependency.

But even that is missing the underlying point. You pay the amount that both you and the seller agree to. If the seller is smart, he takes into consideration how much of the market is willing to pay what amount and maximizes his profits. If the buyer is smart, he considers how much the seller is selling it and how much it is worth it to him. The music industry in general might not be selling at maximum customers, or even maximum profit, but they've picked a price. If you don't like the price, don't buy it.

Re:Disposable income not piracy is behind falls.

[CodeBuster]

isn't the various Idol shows to be found in North America and abroad the ultimate expression of that

IMHO that is not entirely the case. In fact, compared to the "new" material that the "professional" artists are putting out in the MAFIAA label system these days, shows like Pop Idol and American Idol are a breath of fresh air. These shows actually do find and select some talented new vocalists from among the general populations (the diamonds in the rough if you will) who would never have gotten exposure otherwise under the marketing driven, make anyone sound good in the studio, craptastic MAFIAA label system. Consider the following:

1) The contestants are selected in a grueling process of elimination where actual performance is judged brutally by judges, like Simon who doesn't pull punches when the performance is sub-par, without regard to favoritism, who the contestant is connected with, or crap like that but rather solely upon whether or not, in the opinion of the judges, the contestant could earn the best return on their (Simon's) money if they sign them for a recording contract. Now, admittedly the audience sometimes votes for bad contestants just to make some trouble, but everyone knows that they are still bad so in the end it doesn't really matter that much for who wins the competition.

2) At almost every stage the contestants get to choose what songs they are going to sing and although the choices are sometimes limited to the catalog of a particular guest professional artist or genre there are generally plenty of potential song choices for each contestant.

I particularly like it when professionals make a guest appearance on the show and end up sounding worse then the talented young contestants. They invariably invite the comparison just by appearing on the show. In fact, I don't understand why some professionals appear on the show, it only highlights the fact that they are over the hill or even worse that they were never as talented as some of the up and coming contestants...a potentially bad career move for them.

Frankly, I don't much care for pop style music, but there have been some really good female African American Jazz style vocalists on the show who sound great when they sing the old standards from the likes of Billy Holiday and Ella Fitzgerald.

My point is that contrary to contributing to the problem of mediocre music, shows like American Idol, could potentially be the antidote to no-talent bands and the crap that has come out of the marketing driven "promotion" of sub-par "artists" by the MAFIAA labels. It is really hard to hide the fact that you suck when you have to sing live in front of a studio and television audience straight into the mike with no second takes, remixing, or other studio tricks. In such situations the real talent tends to come forward while the hacks leave in disgrace (or hopefully don't even make it onto the show in the first place).

Re:Disposable income not piracy is behind falls.

[Admiral Ag]

"Madonna was taking off her clothes on stage while Britney Spears was in diapers." That's nothing dude, Alice Cooper was wearing diapers on stage while Madonna was in diapers.

stop the lawsuits

[Dr_Art]

So, umm, when are you going to drop the lawsuits???

first end the war

[spune]

You should end the war on consumers before you start talking about how it was a mistake.

Ironically

[Floritard]

His use of the word glacial reminded me of this xkcd comic. I wonder if he's a fan...

Perhaps

[Otter]

I'm left wondering how you can file a series of lawsuits inadvertently.

I think he means that back in the Napster lawsuit days, when all you idiots were crying about how the RIAA should be suing illegal filesharers and offering up a stream of condescending analogies about how toolmakers shouldn't be responsible for the actions of users, they made the mistake of believing you.

it's not the lawsuits

[l2718]

Ah, but he's not apologizing for the lawsuits -- he's apologizing for not releasing DRM-riddled restrictively-licensed music fast enough, which he thinks is what forced consumers to share music illegally. He's still behind the lawsuits (except when his own kids share music -- then it's a "family matter" best punished by the parents). He's warning the cell-phone companies that unless they allow limited sharing, consumers will find their own solutions, and not talking about tactics. The content industry (music, film etc) still seems to have no idea what the consumers want, or that the offering people what they want is usually much better than coercing them to buy what you want them to buy.

Re:it's not the lawsuits

[badasscat]

Ah, but he's not apologizing for the lawsuits -- he's apologizing for not releasing DRM-riddled restrictively-licensed music fast enough, which he thinks is what forced consumers to share music illegally.

Exactly. The bottom line is this article isn't saying anything like what's being implied in the summary; in fact, just the opposite.

His "war" with consumers, from his perspective, is that the music industry wasn't offering consumers what they wanted, so they went out and took it. But if you read the rest of his comments, the problem is he still isn't understanding just what it is that people want. He thinks that DRM-free music is just being used as a means to an end rather than being an end in itself. He thinks that if the record labels just give everybody music pre-made in the formats that they want, even if it comes saddled with DRM and even if consumers need to buy the same music over and over, that they will buy it as long as it's easy and convenient enough for them to get it.

He's totally missing the point, which is that if I have a CD, or a DRM-free digital download, I buy the music once and can then put it anywhere I want to. I can listen to it, my wife can listen to it, I can make a ringtone out of it, I can put it on my iPod or make a mix CD. His idea is still to sell you multiple copies of the same tracks in all these different places, and he thinks where his company went wrong was in not doing that early enough. That's just as wrongheaded as Warner ever has been.

And he says absolutely nothing about the lawsuits, which he will no doubt continue supporting.

Re:Death throes of an industry

[bwy]

All these lawsuits are just an outdated industry with an outdated business model trying to stay alive. They want to keep the margins as high as they were when vinyl was being pressed. They're not adapting, they're just kicking and screaming theirselves out of business.

That is really the entire problem in a nutshell. The funny part is, this is almost 2008. The time for the recording industry to be pioneers was back in 1995! Thirteen years ago! They could have become a major player in the digital age been a guiding force. Almost every other industry in this country adapted themselves in some form or another to do business in this new age.

Re:Who won?

[kebes]

as a result of course, consumers won. Really? Winning a battle doesn't mean you get everything you want... but it does mean you've prevented your enemy from getting the thing they wanted from you.

In the "war on piracy" their intention was to prevent people from sharing music (i.e.: to at least maintain their previous business model). However, the consumers won that war: at present people routinely fileshare. Most people I know have an iPod (or equivalent) and all of them have it filled with music, where they only paid for 0-20% of those tracks. The average consumer is file-sharing. The industry couldn't stop it. The consumers won that battle, and the industry lost.

As they say, however, the battle may be won but the war is far from over. The grander issue here is whether copyright law itself is valid in its present form... and whether changing it means more protections/enforcement (for the established industry), or more freedoms/rights (for the citizens).

I'm still boycotting new music purchases. As well you should. There are so many better sources for music (independent labels, creative commons music, etc.) that there is no excuse for purchasing any music from companies involved in the unethical legal and lobbying tactics of the established cartel.

That's when the real victory will come: when these currently "fringe" sources of music become the norm, and the established cartel withers away (or reinvents itself to survive).

It's not just the overlap

[Anonymous Brave Guy]

I'm sure there is some considerable overlap between people who (to some degree) pay for music and people who (to some degree) rip it illegally. But I don't think that's the root cause of the problem (or at least, not the only root cause).

The basic problem is that by attacking the pirates, the megacorps have made their products worse even for 100% legitimate users. I am sick and tired of having to sit through unskippable ads at the start of legally purchased DVDs. I am sick and tired of having to wait several seconds while my legally downloaded music track is checked out by some DRM-checking engine. I'm sick and tired of having to jump through hoops to "activate" my legally installed software. I'm not even going near various new toys (I'm looking at you, HD discs and Windows Vista), in large part because I don't trust them not to break and the companies who took my money to leave me hanging after all the horror stories.

Now, sure, part of their problem is that by doing this they make their legal products relatively worse than the illegally ripped versions, rather than equivalent except in price and legality. This no doubt motivates a significant number of people to rip things just to avoid the crap.

But they also make their products worse in absolute terms. Why on earth would I pay the same amount of my money for something that is less pleasant to use than what I used to get? In fact, why would I pay my money at all, when I can use numerous legal alternatives that come without the headaches, even without resorting to copyright infringement? I have a finite budget, and I can find entertainment from perfectly legal sources that don't line the pockets of big media: live music or recordings by independent artists, OSS for software, etc. Does it really matter that I haven't seen the latest blockbuster movie on HD-DVD, or played the latest DirectX 10-enabled game, as long as I'm entertained by what I spend my leisure budget on?

The short answer is no, it doesn't. If the megacorps want me to spend my hard-earned money on their products rather than someone else's, they need to make the better products. This argument has nothing to do with ripped versions of the same products, and everything to do with more pleasant alternative products becoming more widely available.

Read this guy's resume.

[Animats]

Well, what do you expect? Read Bronfman's entry on Wikipedia. He was the heir to Seagram's Liquor. His whole life has been carried along by family connections. Highlights from Wikipedia:

• "He was particularly active in school theatre, an interest his parents supported by donating to construct The Ann and Edgar Bronfman Theatre during a 1967 expansion at The Collegiate School, the prestigious private school in Manhattan which Edgar Jr. attended."
• "The summer before his final year of high school, in 1972, he was a credited producer on the film, The Blockhouse. Despite his inexperience, Bronfman's involvement was accepted because of his connections and access to financing."
• "By 1994 he became the Chief Executive Officer (of Seagrams), where he began a move away from the traditional liquor business and into entertainment. The first step in this diversification was the widely criticized sale of Seagram's stake in DuPont."
• "Bronfman, Jr., then led Seagram into a disastrous all-stock acquisition by French conglomerate Vivendi in 2000."
• "Seagram's for all intents and purposes ceased to exist."
• "On February 27, 2004, Bronfman finalized the acquisition of Warner Music Group and he has served as Chairman and CEO of the music company since that time."

He didn't build up Warner Music, or move up within the company, or come to it from success elsewhere. He bought the thing with inherited money, after a long career as a failed executive.

System Shock 2

[Akaihiryuu]

Slightly offtopic (or not), but I couldn't resist. That really reminded me of the behavior of the Hybrids in System Shock 2...how they would run at you and beat you with pipes while apologizing to you and screaming for you to run away.

Re:Paying = Winning?

[sm62704]

These are marketers. Polish that turd. It's like the old car commercials, which I have finally decoded.

Pontiac: "We build excitement". The brakes and handling suck.
Chevy: "Like A Rock". Damned thing won't start
Ford: "Quality is job 1!" They have a lot of work to do in the "quality" department.

It's kind of like the lottery, too - "you can't win if you don't play". You can't lose, either.

These boys are liars. If Zaphod were listening to these bozos, his glasses would go jet black in no time. It makes me feel dirty just listening to them.

-mcgrew

i actually agree with you

[circletimessquare]

iTunes is just a stopgap measure between the old world and the new

in the new world, all music content will be free. artists will support themselves with tip jars and advertisements and touring. and THERE WILL BE NO MIDDLE MAN. because the internet has simply replaced them

iTunes, bertelsman, polygram: dust in the wind. the dutch east india company. extinct. defunct, irrelevant and unnecessary

and these developments have nothing at all to do with all the tired old legal arguments. it will just happen, because it's simple economic forces at work

the final implications of the new technology called the internet is the extinction of all music publishers