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Warner Music Group CEO hits back at Steve Jobs

Written by James Delahunty (Google+) @ 25 Sep 2005 21:23 User comments (27)

Warner Music Group CEO hits back at Steve Jobs Warner Music Group CEO Edgar Bronfman Jr. has hit back at the comments made by Apple CEO Steve Jobs earlier this week that accused major music labels of being greedy for demanding that the prices of some music downloads should be pushed up. Apple has a policy of selling songs for 99c. It's simple and it's easy and good for an emerging market to have set prices, but the music labels believe that variable pricing should be used based on the popularity of tracks.
"There’s no content that I know of that does not have variable pricing," said Mr. Bronfman at an investors conference in New York. "Not all songs are created equal—not all time periods are created equal. We want, and will insist upon having, variable pricing." Steve Jobs worries that increasing the price of music will simply turn many users of legal net music stores back to piracy on P2P networks. Mr. Bronfman believes that Apple's one price for all tracks is not just unfair to the labels, but also to artists.

"To have only one price point is not fair to our artists, and I dare say not appropriate to consumers. The market should decide, not a single retailer," he said. "Some songs should be $0.99 and some songs should be more. I don't want to give anyone the impression that $0.99 is a thing of the past." One thing the music industry needs to adjust to is the difference in selling music on CDs as full albums and selling music as Internet downloads; most consumers are only interested in a few tracks.

One of the biggest complaints about albums by consumers is that quite often you buy an album after hearing some single from it, then listen to it and find out that it was only the singles that you were interested in and the rest of the album is just not for you. Apple's iTunes and all the other music download services fix this problem for music buyers by allowing them to buy individual tracks. For now it is more of a market for single track purchases than full albums.

Bronfman also expressed disapproval of the iTunes / iPod system, where consumers who purchase music from iTunes can only store it on an iPod due to Apple's FairPlay DRM technology. He believes that it is wrong that the music industry has such a huge roll in promoting the iPod, but does not get a share in the profits. "We are selling our songs through iPod, but we don’t have a share of iPod’s revenue, we want to share in those revenue streams." he said. "We have to get out of the mindset that our content has promotional value only. We have to keep thinking how we are going to monetize our product for our shareholders, we are the arms supplier in the device wars between Samsung, Sony, Apple, and others."

However, if he feels the music industry is entitled to a share in the profits of iPods, then would he make the same argument for other MP3 players that are capable of playing songs protected by Microsoft's DRM technology? If so, then one would feel a little more compelled to agree with Steve Jobs' comments on labels being greedy considering they would like to have consumers pay more than 99c per song, get a share of the money the consumer gives to buy an iPod or any other MP3 player and then have the consumer pay an extra tax on top of the price of the MP3 player to cover for possible piracy.

Now a system like that would be greedy.

Red Herring

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27 user comments

125.9.2005 21:48

Well, I Say Let Them Tear Each Other Apart, Having An Internal Issue Like This Only Strengthens Claims That The Industry Is Greedy, And Should Be More Closely Monitored... AND SHOULDNT SOMEONE TELL OLE' Mr. Bronfman THAT IF ALL TRACKS ARE NOT CREATED EQUAL, THEN WHY DO I HAVE TO PAY THE SAME AMOUNT FOR A CRAPPY ONE HIT WONDER CD, THAT I PAY FOR A MODERN CLASSIC LIKE SLIM SHADY LP??? whew..all caps a lil outta control, my throat hurts from all that yelling...but really, by that same arguement you could say it is not "fair" to charge UK and US consumers 5x the price for a cd then in other countries that do not demand the same pricing... i hate hypocritical Suits.

225.9.2005 22:33

you've got to be kidding. if i were steve jobs, i'd take a fat shit on bronfman's doorstep and tell him to take that to the bank. did anyone else get a mental image of a salivating blood-stained face suit-and-tie lackey when reading bronfman's statement? most people using itunes don't even go m4a/aac.

325.9.2005 23:14

Um...well...Bronfman can kiss my @ss!!! See the thing about it is...first they wanted to stop piracy, that is fine by creating a system of paying for certain songs instead of getting a whole album where only 1 out of the 21 songs that you get are good. Ok fine...I can understand that since you can just buy what you want. NOW...heaven for fend...they are systematically WANTING to increase the dollar value on songs. Well, that is just F***KING unreasonable. WHO ARE THEY TO DECIDE WHO IS MORE POPULAR????? They are just suits who are looking at the dollar value instead of the consumer. On top of all this, if they THINK FOR ONE MICRO SECOND that consumers are going to stand for that S*IT, they are SORELY mistaken. I respect Steve Jobs for doing what he can to level the playing field, but at this point, and we all KNEW it would come to this, they are just getting too damn greedy. Funny...the tighter you pull the reins, the harder it is going to be to control something. Guess they will soon start seeing piracy LEAP forward at this point, cause I was ACTUALLY thinking of trying out iTunes.... But not anymore, if they raise their prices.

425.9.2005 23:37

Some songs should be $0.99 and some songs should be more.
Notice how he never says "and some songs should be less"...
We are selling our songs through iPod, but we don’t have a share of iPod’s revenue, we want to share in those revenue streams.
Absolute pure greed. If I have some friends who make up a band and I help them make and sell CDs, that does not mean that the manufacturers of CD players owe me money. I hope lots of people read this.

526.9.2005 0:17

For once I'm on Steve Jobs side.

626.9.2005 1:00

What sort of sucks about the state of the art of the recording industry right now is the self-serving attitude of of the people in charge. The atmosphere that they seem intent on creating for themselves is so overwhelmingly negative that it profusely reeks. I really don't want to just hate on them as that is not very constructive, but I think that they would do themselves a favor if they would become more consumer oriented. They do have such enormous resources, including cutting-edge technology, but seem content to use it on nothing more than to lower their overhead (improved infrastructure) and also to catch a few pirates. Instead of alienating the majority of their consumer base by running around as if they were J. Edgar Hoover going after John Dillinger, perhaps they would be better off using some of that technology to improve their deteriorating product. Hey guys, at least make it look a little like you care about your customer. For example, when I go to the music section of a store (okay I admit I still do) I can never find any DVD Audio albums. Sure, there are plenty of music CDs with DVD Video content, but you could be so much more innovative when it comes to making your product sound better. Then again, with the greed that permeates your industry, I'm talking about those remastered albums from the 1980s that you are charging 25 bucks a pop for, I would probably have to mortgage my home for anything that you guys put a little effort into.

726.9.2005 4:09

[Quote]He believes that it is wrong that the music industry has such a huge roll in promoting the iPod, but does not get a share in the profits.[/Quote] What kind of crap is this? When music was sold on vinyl records, did the music industry get a cut on every record player sold? Since a lot of music is played on the radio (and in many cases, that's a person's first exposure to a new song) does the music industry get a cut on every radio sold? I think not. So why should they now expect a cut on every iPod? GREEDY! They see a cash cow and are not happy that they don't have their grubby fingers in it.

826.9.2005 7:42

Isn´t greed just amazing, there´s no limit... 1 dollar is already overpriced in my opinion, at least if compare the prices to CD´s and consider how restricted the usage is. Most songs should be less, not "some songs should be more".

926.9.2005 7:42

Funny thing, I said it in another nwes the other day and ill say it again this poor loosers are just aiming the wrong people, lets say for a sec. steve jobs just pulls the plug off itunes just cause he wont play along with the greedy suits, so as he cannot leave hundreds of thousands(i dont really know the exact number but must be pretty big) of customers of apple who already bought an ipod without a support, he just releases a firmware which can make your ipod like a regular mp3 player, wich has been proved on the past to be posible just that in the past other users made it possible, so that would be hilarious it would be to go from one moment a great great revenue to the music industry to flood the market with mp3 players which will if not for sure very likely be involved in illegal music sharing, so i would say if they know what is good for them they should let steve jobs run his bussines and be thankfull enough for saving those .99c they could´ve lost with a couple of clicks in the right places.

1026.9.2005 8:32

I don't trust any of these guys. Neither Steve Jobs nor Bronfmann really care about the average consumer in my opinion. What they really care about is making money of course and its their job. But what I don't like is when these suits try and increase their profits at the consumers expense. I mean these guys probably have great big houses and yatchs and their complaining about how they all need more? Bronfmann wants higher prices and in return his profit goes up. Jobs wants them to remain the same so that people don't get turned off of itunes and his profits keep growing too. Boo Hoo. I'm the average consumer getting by week to week buying pampers and milk and spending over $3 per gallon of gasoline and hoping I have money left over to buy me some beer and cigs so I can sit down and try and watch the game on tv while my wife blasts her ipod. Go figure. I agree with gsuscrazy, let them tear each other apart. Greedy Bastards.

1126.9.2005 10:01

Sad but true if you want a song legaly you will pay now with the idea not even a price increase even aplied to any website only implied that their needs to be a change every one is in an uproar.... how about this ... the filler songs are worth about a nickel and the really good ones are worth 25 cents.. if the song makes the top 40 we give them 50 cents and the top 10 gets 75 cents and if the song hits number one we give them 99 cents to download it but when it drops off the charts its only woth a nickel this way the artist will put forth a little more effort in making a hit and not filler and this way most of us would give up dling all together..... the same type of sliding scale could work on movies and last years software as well...

1226.9.2005 11:18

This is just the prattle of the dead. Record companies have been circling the toilet edges for many years. This just verifies what the disease really is. It is the musicians and the new "digital music companies" themselves that need to take hold of the situation and cut these retrograde pirates out of existence. Yes, it is the record companies that are the pirates. Consider that. In a few years, it will be all digital, distribution will be a thing of the past.... like film cameras, and there will be no need to listen to this bullshit. Vote with your money and send the real pirates to fuckin' hell.

1326.9.2005 11:42

Where the heck is this idiot coming from? When I was a kid, a 45 rpm VINYL record cost $.79. They ALL cost $.79, and they had two sides: the A side (the hit) and the B side (the non-hit). Sometimes, if you were lucky, you had a "two-sided hit." Even those were STILL $.79. The number one record did not cost any more than the number ninety-nine record. If a record at number one cost more, you can bet your life it wouldn't have stayed at number one for too long. VOLUME was the important thing: if you sold more, you made more...BUT EVERYTHING HAD THE SAME PRICE! It's basic marketing. Now, these guys don't have the cost of the vinyl or the c.d.; they don't have to package it; they don't have to ship it, yet they want to get paid MORE! Artists need to market their songs DIRECT to the consumer. What do you need those greedy leeches for? Get rid of them. They are dinosaurs. The meteor has struck: digital distribution is the way of the future. Eliminate the middle man, for good!

1426.9.2005 11:56

And there we go. The devil reveal s his true colours. Well pointed out that he nevers suggests a pricing structure with 99c as the MAXIMUM. What exactly do they think should be classed as more expensive anyway? A new track? Crazy Frog is bang up to date and is absolutely terrible yet an ancient Beetles track would be classed as back catalog and cheap. Does that seem right? So then should tracks by a famous artist be more expensive? Of course not. Why should the latest U2 track be worth more than a newcomer like James Blunt or Damien Rice? A good track is rewarded with popularity. If its good more people buy it and you make more money. Simple. More important here though is the fact that if single track downloads get more expensive then how is it better than buying the real CD! I already think its disgusting that a legally downloaded album costs as much as a real CD that involves manufacture and shipping costs. Take this - David Gray's Life in slow motion is brand new. Itunes price: £7.99. (with all the limited rights that that involves.) price: £8.75 Delivered to my door. Justify that. Its time artists dealt with the oline stores directly, there remains a fixed pricing system and that is shared evenly between the store and the artist. I am all for online distribution and have used all of the various means. Legal and otherwise. I am into dance music and most of it is simply not avalable from stores like itunes. I would be more than willing to pay for the stuff if there was somewhere to get it but the only source is p2p networks prividing ripped copies of vinyl. Oh and as a final point. One of the few places that does provide this music online is the label itself Here the price is £1.00 for tracks that can be up to 10 mins long and in unprotected mp3.

1526.9.2005 14:48

Not a suprise that a CEO of a major label is an idiot. Greedy bastard, I WILL NEVER SUPPORT YOU!

1626.9.2005 19:08

Wow,these bastards must work with duracell,they just keep going and going and.......

1726.9.2005 19:32

Pure Greed Pure Greed. How would the music industry execs feel if someone like Steve Jobs or Bill Gates decided to start signing artist to more of a fair profit sharing plan than the music industry does. With Digital distrubution elimanating cd's soon and their own mega sites in place and huge numbers of people who are loyal to certain brand mp3 players its just a matter of time. Someone should pull the trigger and get it over with. Lets get the revolution started. Better songs better pricing and happier customers will be the outcome. Who doesnt want that. The Greedy execs dont thats who.

1826.9.2005 22:17

if i may i'd like to direct everyone to a previous AD article discussing the "warner" label planning an "e-label"... just a warning it's very disgusting how these record companies do business.. plz read. from my standpoint ladies and gent'z, i'll never pay for a music download, and from the looks of it i'll never give "warner" a dime, or a penny. Buy used cd's and dont support these greedy companies! (riaa, warner, even itunes)

This message has been edited since its posting. Latest edit was made on 26 Sep 2005 @ 22:19

1930.9.2005 6:46

THe biggest problem is that the same price is charged for every song and it does not matter if the song is trash. I rip all of my music at 320 or wma lossless which is a higher quality than what can be bought online. The best solution is for artists to sell there wares online and cut out the marketing and packaging.

2030.9.2005 10:33

Link below provided from 9/29/05 Hopefully this view of the future won't ruin anyone's beaut of a morning... but it should...and everyone should sign up for EFF newsletters and take action by writing, calling and emailing their respective legislators!

212.10.2005 2:21

Here we go again. Poor Steve Jobs. He must be tired of others making or wanting to make money out of his inovations. I must check to see if Bill Gates is in fact a major shareholder in Warner. Certainly seems to be similar tactics.

222.10.2005 6:55

I dont think we are protecting Steve or Bill but in this case they may be the lesser of two evils. As for the problem being that the same price is charge for either a good or trashy song I dont thinks that the consumers fault. If the song sucks people wont buy it period. The records industry knows this. For example the Outkast album wich had about 20 - 23 songs really only had 3-5 songs worth a buck inmy opinion, the rest just album fillers.So thats why they want to raise the price on the hits songs to maximize profit on the songs that the customers do want to buy. Pricing will be around 4 bucks if they have there way. If a ringtone is price around 2.50 and thats a 30 second clip , do you think pricing on a full will be any less? No, so thats why I think Steve or Bill might be a better fit in this scenerio. Yes they have an interest sell more IPOD's and keep people downloading and they will do that with a fair price scheme that customers like and that seems to be set around 99 cents.

233.10.2005 6:18

Just got the whole picture... it was a grab game .... if I tell you that we might have to raise the price of a product that you can buy right now by 25% in a month or so then you'll buy it right now... check out this artical about the download rush... it's been nothing of a test to see if they can incress the flow for the month.... think of music as gas(yeah I know it's alot of hot air) but when they anounce that the war or so hurrican is threating the supply chain then the price jumps and we all run down to get what ever we can at the old price... befor it goes up... the same goes with music I mean they already own it so why should the price of music go up?

244.10.2005 13:19

Mystic has nailed it... These guys are just shepherds guiding their flock of sheep, and all the sheep are going right were they are being herded. If you don't like being one of the sheep, cut yourself out of the flock. I am an old man to most of you. My favorite music was made in the 70's and early to mid 80's. The music that I listen to was purchased on 8 track tapes, vinyl lp's, and cassette tapes. Since these mediums are no longer feasible to listen to I must re-purchase the same songs again, (if I can find them) over and over. In a few years when your Itunes songs will no longer play and mp3, wma etc. have become useless because they have evolved into the next new technology, you will see what sheep you were. Just as I have seen about myself. I downloaded as many of the songs I liked before the piracy thing became such a big deal. I did not consider myself to be stealing anything. I had purchased these songs over and over. I was just upgrading the music I had already purchased up new a newer medium. The greed never goes away for these "suits" they have their stockholders to keep happy. "Stockholders are the real parasites on society."

254.10.2005 13:33

I dunno I was always a huge supporter of Steve Jobs loved his shows his opinions, then he goes and says pirates should burn in i dunno if anyone else has seen one of his shows but this kinda angers me but seriously everyone makes mistakes and i forgive him lol anyways i think that after one person buys a cd then they should be able to do whatever they want with it rip,p2p etc. itunes makes money from their already huge clientel and still they raise their prices bull........

264.10.2005 18:12

I hear you kworkman.

274.10.2005 20:58

"Stockholders are the real parasites on society." That makes the Stock Exchanges the parasite's nests. Now there is the true evil pit.

We all are clones so any copying should be legal

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