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back to article Warner Music gives up on free streaming services

Warner Music is to stop licensing its music to free streaming services. Streaming services like Spotify, last.fm and We7, which use adverts and subscriptions, were seen as a great way to wean freetards onto paid-for services. Edgar Bronfman Jr, chief executive at Warner Brothers, said: "Free streaming services are clearly not …

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FAIL

le me rephrase Warner Statement....

Warner means:

We cannot stand a honest business model, we don't feeel confortable not stealing every single penny from our consumers pockets. We think suing our onw consumers and destroy the life of millions of american families is a better business model.

Hum.... note to self: never ever buy any warner product under any consideration EVER. but make sure you enjoy as much as possible.

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FAIL

Dinosaurs!

talk about moving backwards! How can the RIAA$$ possibly hope to stay competitive if they stick their heads in the sand, or whistle to the "We don't need to innovate" tune?

I don't know about other Reg readers, but the only subscription service I would *Ever* use would be one that, for a monthly fee, I could download whatever the hell I wanted, without DRM, in a high quality file of the format of my choosing. There's no way I would pay a subscription for a streaming service if I had nothing to show for my money at the end of it. Sorry Warner, but DAB works just fine for that. Digital (or indeed Internet) radio doesn't always cater to my tastes, but even Spotify gets it wrong sometimes, and I'm not going to fork out £x with no guarantees that you're even going to recommend me stuff I like.

I am a big fan of free streaming services, love Spotify and We7 (not so keen on last.fm, but only because of the rumours that they're in cahoots with the BPI enforcement mafia) and I have discovered many new artists through their recommendations, and gone out and either brought their album (a sale to the music industry), or gone to see them live (profit to the band), often both.

So, Warner Music, I ask you this. If your music is not brought to my attention through the free streaming services that I use, how exactly is it going to be brought to my attention? Answer is it won't, so it's highly unlikely I'll be buying any Warner produced music in the future. I doubt it will be missed.

EPIC FAIL. Here's 10p Warner, go buy yourself a clue about how your customer base operates

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Maybe that are not interested in YOU discovering music,

Maybe that are not interested in YOU discovering music, because it means they have to support variety invest in many genres and groups and artist : here is better business model

* control what your "customer" can have access

* spend on publicity (those are your party friends anyway)

* sale millions on as few arttist as possible, plus the more you narrow the genres the more you model "customers" tastes so it is all a win for the next 'artist'

* rince and repeat.

They are not in the music business they are in the sale business

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Thumb Up

@ Annakan

Annakan has it SPOT ON!

Variety and diversity is the enemy of the "music business" (because it makes it impossible for them to control and dictate what people buy). A lot of what they do is really about restricting and keeping control of supply rather than worrying about fair remuneration for their artists.

That's why the big labels hate things like Shoutcast. As far as they are concerned, even the mere act of 'listening' destroys their "business model" (because as listeners flip from station to station, they start to get into the habit of discovering music for themselves rather than being spoon fed the latest manufactured chart bullshit.)

Once the habit of seeking out your own new music has been acquired (and people realise the truly huge extent of the different styles, genres and artists that exist) then the listener can no longer be relied upon to go back to choosing only from mainstream music provided by the major labels.

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Flame

You know how this works...

http://en.wikipedia.org/wiki/List_of_Warner_Music_Group_artists

Find an artist you like on there, hit their website / fansite / bookface page and tell them why you're not buying their music.

If you feel so inclined.

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Bronze badge
Go

OR just download it...

and let the band know you are doing it, hell send the band some cash for their troubles. Words are one thing, action is another.

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Paris Hilton

OMG!

Paris Hilton is in that list! Didn't know she sang?! Well she won't be singing long on Spotify by the look of things.

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@Yannic

She can't act either, but that hasn't stopped idiots casting her . But it is a case of movie matching actress, namely both being low rent, low value, low IQ.

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Grenade

Typical

A model people like comes around, where some are even willing to pay for it, they endorse it for a while, then decide to pull the plug.

If they think everybody is just going to go out and buy the music they were listening to on spotify instead they're wrong. A lot of people using spotify like it because of the format (convenient, all under one roof), were happy that it was legal because of the ads, but were never going to go out and buy the CDs. They'll just listen to something else on the service instead. They didn't buy anything, and they're not going to buy anything. The monthly fee is tempting to get rid of the ads, without restricting their choice.

Other people, such as myself have bought several albums I've listened to on spotify, while they were still available on spotify. It didn't matter that I could listen to them for free, I like the concept of physical ownership and being able to store my own local FLAC copies of the discs I own, to convert on demand for my MP3 player etc. For me, spotify is/was a nice way to be able to preview some albums, without having to resort to illegal means, it resulted in actual physical sales for albums I deemed good enough, of which there were plenty.

It might not be what Warner want to see, but the true value of their music is far better reflected by business models like Spotify (wihch is really just a personal radio station) than the prices they'd like to charge for their lossy compressed files. They're obviously afraid of this becoming the accepted value, but it's inevitable anyway and all they're going to achieve by pulling the plug is driving people back to torrents etc. It's as if they've seen the future, and decided they don't like it, and still somehow think they can change it.

Give people a reason to buy your products and they will. I quite happily just paid ~£27 for the deluxe edition of David Ford's new album, there's nothing special about it over the standard one, it's the exact same CD, but I'm paying the money for the physical product.

Really, need a 'pulling hair out' icon here, sometimes it's hard to believe that the people making these decisions miss the obvious.

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FAIL

Spotify Preview to Purchase

"Other people, such as myself have bought several albums I've listened to on spotify, while they were still available on spotify"

Yup, me too.

*Gives Warner gun, points at Warner's foot*

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Alert

I'm with B3vil

I've also adopted to the "listen to new stuff on Spotify and buy a real CD" model. I've even suggested to the Swedes that they put a buy-it-now link to Amazon for exactly that purpose and maybe get a small margin.

I think the tragic fact is that Warner (et al) are just far too greedy. There is no way to convert "Billions" of non-paying customers to a subscription model - they will simply get it for free, even if it means going back to borrowing friends CD collections.

The music industry really has no clue about their market.

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FAIL

B3vil's says it for me too

On one hand you have most of the digital download services that will "graciously" sell you a DRM-encrusted product that you might be allowed to keep for a while. On the other, you have a physical CD (from retailers like Play or, and this is increasingly the case, your local supermarket) which is DRM-free; of (arguably I guess) greater longevity; and in some cases a heck of a lot cheaper, (a 20 track CD for UKP5 I bought last week works out at about 25p per track, which is cheaper than just about all the digi services). A couple of seconds with a CD ripper and you can put the CD aside for safekeeping and have whatever quality and format you want - MP3, FLAC, ALE, AAC, etc - no problem! Doesn't seem much of a choice to me.

I use Last.FM to preview (where I can) new music, and where that isn't possible in most cases the artists themselves have previews on their websites. Listen to the preview, and if it suits then buy the CD online or at Tesco's. That said, I did make use of Play's digi service recently for a couple of albums - I love the idea of DRM-free, and the quality/cost was quite good.

As to the gentleman from WB - a subscription service is NOT the way to go. What happens to your 'purchases' if you end the subscription? Yep, that's right, they stop working - mainly because they'll be stuffed to the gills with nasty DRM. So that subscription service they love is nothing more than a music _rental_ service, unless your "10 bucks a month" is going to give you access to CD-quality, DRM-free downloads.Otherwise the 'service' offered is so far from what I want/need that it's laughable.

As others have said and/or will say - when are the music industry going to wake up and stop acting like a lot of lemmings in suits? It's so pathetic it's almost funny.

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Pirate

LOL

And then they'll be crying to the government for being ravaged by piracy... Well, screw them!

I'll be voting for Pirate Party next election, and hopefully they can start doing something about this ridiculous mess like in Sweden and Germany.

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Silver badge
FAIL

Warner Bros. want to stop free streeming services

So are they also going to give up on radio as well? Idiots they have just given up on selling to the next generation of music listeners.

If I owned an Independent Label I'd be laughing all the way to the bank.

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FAIL

Not so much with the radio...

"So are they also going to give up on radio as well? Idiots they have just given up on selling to the next generation of music listeners."

Radio is not the equivalent of streaming Internet music in most cases. Spotify lets you listen to what you want, when you want it, correct? No radio station on Earth works like that.

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Anonymous Coward

Space for rent

They also get paid from radio, well in the UK they do.

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Anonymous Coward

Genuine question here....

How do ad-supported streaming services like Spotify NOT make money, when ad-supported radio stations manage to? Is there extra money involved in picking the songs? Or in playing the same song repeatedly?

Genuinely curious, as Spotify is fantastic and I'd hate to see it disappear.

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Spotify lacks the targeting and mass...

Media buyers purchase ads on commercial radio stations in large part because they know exactly what audience they will reach, at exactly what time of day, and usually in large numbers (it is BROADcast, remember). Media buying for ads on Spotify is much more difficult to target, and perhaps more importantly does not include many very desirable demographics (i.e., older adults with enough money to buy a lot of stuff). And it is far from clear the numbers are there, at least in any one geographic market (another advantage of radio is it's ability to target by geographic market very reliably, and to allow small, cheap campaigns in local markets - think your local auto dealerships).

So yes, while a media buyer CAN buy ads on Spotify, the odds are against it being as effective (at present!) as broadcast media, and it really only appeals to large multi-geo companies. That will likely change as GenYers get older, and as targeting improves through technical means, but in the meantime the economics of it are very questionable...Warner does have a point about that.

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Pint

Ad Supported Radio

In a nutshell - local and regional advertisers get a lot more bang for the buck on conventional radio. If you're trying to reach a small to medium sized, centrally located, audience then commercial radio is far more effective than the net.

Hence Google et al.'s mad race for personal details. They really need to know how to bundle the net into these regional categories to get small to medium sized businesses to advertise with them.

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Anonymous Coward

Simple actually

Spotify pays the content providers every time a track is played, but only a tiny amount. If you play a song once, they only get for it a single play's worth of money. If you buy a CD with the song, however, you pay the full amount up front (enough to amount to an "infinite" number of plays), and they also bundle in a bunch of songs you may not want.

They find that Spotify's business model is digging into their profits because people pay (through ads) only as much as they need to and nothing more, and are turning away from CDs. That's why everyone calls them "money-grubbing thieves who don't want to adapt to what people want".

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Thumb Down

This will not end without legislation

Until copyright is reduced in scope we're going to get nowhere here. Copyright and Patents on stuff that is easily replicated should be limited to a few months at best, before it becomes generally available. That way if you want a state sponsored monopoly, you'd better have a good pipeline of new stuff lined up.

It isn't copying that is killing music. It is being strangled by archaic IPR laws tailored to vested interests.

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Megaphone

Fiat Lux !?

I too believe that it is a radical change in legislation we need as the current mess is due to legislation granting a legal monopoly making it possible to exploit both the artists and the consumers to a totally unreasonable degree.

My suggestion would be a modification of the concept of copyright so that it would not be possible to transfer the copyright itself to another party; any contract to that effect would be null and void by law. Instead, the originator could/would grant licenses to any number of parties to produce copies of the work. This would seem to restore competition into the distribution business; this has currently been eliminated as the copyright holder and distributor tend to be the same entity.

I also like the idea of shorter, reasonable protection times (say 20 years from first release for music, movies, ebooks and other similar, digitally distributable stuff ?), and, making it mandatory to file a digital copy of the work to be protected to a public database from which it could be obtained (for free or for a modest fee covering the actual expenses) after the protection has expired. Such a filing would be a precondition of getting the protection in the first place for works that are to be distributed in a digital form. This would also have the very important side effect of protecting the cultural legacy of our time, at a very modest cost. (Not my ideas, mind you: I read something along these lines in the Finnish Pirate Party discussion forums the other day.)

[A Hyde Park / soapbox icon, please ?]

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FAIL

Ah well

I'll just move my £10/month from Spotify back to a usenet service provider.

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Bronze badge
Pint

Really make a difference though?

I feel like most here, a good model that was working well, just punched in the face by Warner's greed.

However will it make any difference? Doubt it!

Most of the shit that Warner sell is sold to supermarket checkout plebs, wandering around TESCO or Sainsburys at the weekend during the "Friday big-shop", they will still pick up Warner DVDs of the latest US TV pap, they will still pick-up the latest X-Factor/Talentless screecher cack, so Warner's sales will still carry as usual.

Personally I listen to death and black metal and hate TV shows, so baring a handful of bands, Warner's snub doesn't bother me much as they wouldn't touch my music with 15ft barge-pole!

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never got invited

Didn't see how to pay, Spotify is something of a white elephant in the room. Very few real people actually had a chance to use it, so not a loss anyway.

Ok Warner is the big bad nasty here, but not one single streaming service has been able to compete with usenet and bit torrent. I also count the cost of my internet and the lack of capacity to stream at peak times in my equations!!! (which i think lots on here forget).

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It is sporadically open

Spotify goes through phases of being openly available for signup to the free service, presumably whenever they've got themselves a new chunk of bandwidth/servers on and have the spare capacity. Last time was just before Christmas, IIRC.

Where do you get "very few real people" from? Since it's largely an invite service, I suspect most people will either see that none of their friends or all of their friends are using Spotify. I'm very much in the latter group, and regularly swap Spotify playlist links with folks.

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What a (lack of) surprise!

Genius really - now that the DB bill has got through with excuses that there are legal alternatives helping it, let's just fuck everyone over again now that there's going to be a crackdown on people downloading music 'illegally'.

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Silver badge
WTF?

"Billions"?

WTF? Are these the same sort of figures they use to calculate losses on a single download? It is no wonder they have a screwed-up business model with that grasp of mathematics.

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FAIL

Is this the same Warner Bros that campaigned for variable iTunes pricing

and this week admitted that once Apple finally caved it had an, um, negative impact on profits?

The music industry really still fails to get the Internet...

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Subscriptions?

I'll pay for a subscription over my dead body. I want to BUY the music I want, OWN it, and have is physically on my machine.

Rental schmental.

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WTF?

What is the problem?

I thought Spotify etc paid the royalties to Warner etc thru adverts. If it's not enough, sell more advertising space. I love Spotify, it is THE future - a radio station I can programme. I don't pay because, get this, I like the adverts, it makes it more like a real radio station - get with it Warner or get left behind. Where are all those player piano manufacturers now?

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Gold badge
FAIL

Wow that's dumb.

Wow that's dumb. If Warner Music is^H^Hwas getting cash per play, what do they care if people are paying cash or if it's ad-supported?

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Silver badge

"That's all Folks"

Best strapline of the month, genius.

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WTF?

Yet another try at putting toothpaste back in the tube

Let's face it, the music cartel members only ever tolerated ad-funded schemes in the grudgingest of grudging manners. They would far rather keep renting you the stuff at ridiculous prices, or reselling it to you at every single format change. At ridiculous prices.

The ad thing was their attempt to compete with free, but now it seems with the three strikes thing they think they get another shot at strangling the free market into submission.

If you're reading chaps, prepare for yet another train wreck. All the three strikes thing will do is make encryption a household word. You'll still be screwed, only more so because by the time the penny drops (yet again), it'll be even harder to find people to sue. All the while, broadband will be getting faster and storage will be getting cheaper, to the point where your entire portfolio will be a mere blip on the radar.

I fear this may have been the cartel's last strike. God knows they've had more than three.

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Conical hat for Mr Warner please!

Warners have just shown they are the biggest dunces in that collective lump of stupidity called the recording industry. The RIAA (more correctly called the mafIAA) have repeatedly shown hat they believe the rules apply to everyone but them and that they only have profit at heart, not the artists they purport to represent.

How much of the billions that the mafIAA makes actually goes to the artists? Does the percentage even climb into double figures?

As far as I am concerned they are a bunch of robber barons who need to be kneecapped.

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Double digits considered highly unlikely

>Does the percentage even climb into double figures?

In my understanding, hardly ever: the range of figures used to be 5-10 % (of the retail price) where getting near to the maximum is rare (Gaussian distribution over the range, I'd presume). This is from a newspaper article >10 yrs ago, I'd assume it has gotten worse since, given that these days the contracts suggested to new artists are reported to include provisions for the record companies getting a share of income other than record sales (e.g. gigs, fan products ... I know: this is positively *evil*, as Tori Amos put it).

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Anonymous Coward

Value

Over the years music and movies have been given away freely (to the end consumer) via radio and tv (because it was payed for by ads). As such, it no longer has any monetary value in most consumers eyes. Why should they pay for something they get for free.

The only way the Media companies are going to have a viable business model in the online digital world is to find a way to make it free for the consumer.

It is possible, it just requires all the media companies to work together... so the chances of it actually happening are pretty much nil.

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Oh Deat

SynnerCal why are you lying about DRM? No major retails sells DRM'd music any more - not itunes, not amazon, not play, not emusic, not 7digital - Stop complaining about something that isn't even happening!

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Stop

There's more to this than is being reported.

If you have a look at the transcript of the earnings call, there's a few subtleties that haven't been widely discussed.

First off Bronfman *is* in favour of licensing Warner's catalogue, just at a device or ISP level, so Warner's slice of the pie is coming from them, and not the consumer. Think Nokia's Comes With Music, rather than Spotify, or of Spotify premium provided as part of your ISP service (like it is with some mobile phones).

So he's not dinosaurish necessarily: he's still happy to license, he just wants better terms than Spotify can agree to (cos they ain't making money)

As for me- I'm going to pay for broadband anyway. I may pay more, or switch providers, if ISP's start actually competing for my business in the way that mobile phone copmpanies do. Give me a new laptop and some value added services and I'll come to you, especially if its a similar cost to what I currently pay for just 6mb BB.

More analysis at Bob Lefsetz' excellent blog: http://lefsetz.com/wordpress/

I can thoroughly recommend it, and I think a large proportion of the posters here woul dlike it too.

(No, I'm not Bob)

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Pint

Subscriptions

I had considered paying a subcription of £9.99 per month for the Spotify Premium service so I could use it on a widescreen phone with 3G, Wi Fi and unlimited internet for a fixed fee.

I pay £12.99 per month for Love Film, and if said phone allowed me to watch in the latest Flash format (and if the Flash was updatable, unlike the Flash on the Nintendo Wii), then I could watch films via Love Film on my phone using my subscription with them.

I would not consider paying Sony £9.99 per month, and Warner Bros £9.99 per month, and whoever else £9.99 per month.

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Anonymous Coward

Just the beginning ...

Those people complaining about Warner's business model clearly haven't seen the revenues Spotify get from non-paying users.

Assuming WB get a fraction of this money I'm not surprised they've thrown in the towel.

And guess what ? The spotify sub is now worth a lot less than it was yesterday.

Maybe WB have been shortsighted - but I think they've given Spotify a fair crack of the whip. If spotify had made them money they wouldn have stayed. Obviously it didn't.

Reord companies are slimy money grubbing bastards uninterested in music. However, I'm not sure where this puts companies that want to peddle other peoples products without having to pay for them.

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