Bronfman Tells Mobile Industry to Get With The Program

From Simon Aughton, MacUser:

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.

Speaking at the GSMA Mobile Asia Congress in Macau, Edgar Bronfman told mobile operators that they must not make the same mistake that the music industry made.

"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."

Mobile operators risk the same, he said. Fewer than 10% of mobile owners buy music on their handset, the vast majority of which is ringtones.

"The sad truth is that most of what consumers are being offered today on the mobile platform is boring, banal and basic," he said. "People want a more interesting form of mobile music content. They want it to be easy to buy with a single click - yes, a single click, not a dozen. And they want access to it, quickly and easily, wherever they are. 24/7. Any player in the mobile value chain who thinks they can provide less than a great experience for consumers and remain competitive is fooling themselves."

Bronfman suggested that mobile companies have much to learn from Apple, despite being critical of and iTunes in the past.

Link

(WMG) Downgraded to $5 by Pali Research

From Idolator:

Last month, stock analyst Rich Greenfield said that shares in Warner Music Group were worth a mere $7.50, thanks to consumers viewing music as "just above dust bunnies" in the "worth" department. The stock plummeted, and yesterday Greenfield downgraded the stock's price again, saying specifically that reduced floorspace in big-box stores will hurt the recorded-music business even more.

Rumor du jour has EMI and new owners Terra Firma waiting for WMG to fall even further, then trying to finally combine the two companies once and for all.

Ned Raggett picks it up from there:

It’s been a little over year since the implosion of Tower Records, its long-delayed but inevitable execution (rumors had been going on for years), and my multiple visits to the Costa Mesa location were primarily defined by the appearance of those dust bunnies, both the actual balls of detritus and the numerous musical equivalents. As the prices dropped and more and more of the truly great stuff disappeared into the collections of hoarders like myself — and I was still surprised at the good discs I was finding at 80% or more — the saddest thing about it all, beyond the fates of the employees who were stuck looking for work as Christmas approached, were the monstrous piles of multiple copies of one or two discs by some poor sap of a band or an MC whose stock had likely been bought on consignment and whose life’s work ended up practically being given away at a buck a disc, or even a cent.

Link

Pali Research Downgrades Warner Music Group

Cayocosta

Largely based upon declining sales data, the report also briefly cites the recent Madonna and Radiohead episodes as additional justification for the downgrade to "Sell" while positing that the industry must change - but doing so will take time and the requisite restructuring will be costly.

Stating "we believe an increasing majority of worldwide consumers simply view music as free" the report suggests a new business model must emerge for music consumption; most likely manifested via DRM-free music at no cost to consumers, supported by advertising and promoted through social-networking.

DRM-free downloads are encouraged as potentially increasing digital revenue near-term.

Signup to read the report at paliresearch.com