Music Exec Fires Back At Apple CEO

geniusj writes "Warner Music Group CEO, Edgar Bronfman Jr., has fired back at Steve Jobs in response to the Apple CEO's claim that having variable pricing for iTunes music would be 'greedy.' From the article: '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 ... 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 ... 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. We have to get out of the mindset that our content has promotional value only.' Perhaps iPods combined with iPods are selling music as well, and it's not just a one-way street?"

Re:Do they get a share of the sale of CD players?

[JeffTL]

That man simply does not know the word "iTunes" and was substituting "iPod" for "iTunes Music Store."

Re:The Obligatory Remix

[Fnkmaster]

My personal favorite is that "the market" should decide. Apparently this guy failed introductory microeconomics - when you are a monopoly supplier (or a cartel) "the market" doesn't decide anything, the monopolist looks at the demand curve and sets a profit maximizing price. Sometimes they decide they've been too generous in the past, and having roped consumers into a new distribution channel, it's time to start jacking up prices again as perhaps demand isn't quite so elastic as they had previously thought.

Also, he has apparently never taken Strategy 101, or been introduced to the Theory of Complements - iPods and iTMS (and the downloadable music it distributes) are a classic example of complements. Just because Apple has for ONCE actually played a situation intelligently from a strategic perspective and the music industry has yet again failed to do so (monopolies rarely have any incentive to act strategically) doesn't give them a right to shit.

This diatribe can be simplified into "a company that is not us is making profits in something vaguely related to music and we don't like that". After I finish wiping away the tears of sorrow from my eyes, allow me to say how many nano-give-a-shits I have for this guys problems.

Re:Do they get a share of the sale of CD players?

[tb3]

Edgar Bronfman, Jr. does not know a lot of things. He inherited the Seagram fortune, sold its $9 Billion stock of Dupont to buy MCA, for the sole purpose of becoming a media mogul. He's failed miserably. Here's a great article about him on Slate [msn.com]. I especially like this quote, "Edgar Jr. has been designated the movie industry's official idiot--a 42-year-old child who's squandering his family (and his shareholders') fortune on romantic Tinseltown fantasies."

Don't think he speaks for the entertainment industry; he's an idiot even among those morons.

Re:two sides

[BandwidthHog]

That reasoning might hold water if they were actually investing in the bands. In actuality, they’re merely loaning the bands the money. Even if their “investment” tanks the artist is still obligated to repay the loan.

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[account_deleted]

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Re:Do they get a share of the sale of CD players?

[jangobongo]

The Slate article [msn.com] you linked says:

"Edgar Jr... outraged the industry by proposing that theaters charge higher prices for more expensive movies. Why, he asked, should you pay the same amount to see a $2 million movie as you would to see a $200 million one? Analysts and movie types hooted with derision--that's "like charging for a piece of art based on how much bronze or paint was used," sneered one.

Edgar Jr. wants to treat movies like any other product: If a movie costs more to produce, you should charge more for it.

That was seven years ago!

And now, talking about music:

"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 ... Some songs should be $0.99 and some songs should be more."

Sounds eerily familiar in that context.

Re:The Obligatory Remix

[Fnkmaster]

Perhaps you are confused. Warner Music Group controls two of the approximately 25 board seats of the RIAA Board of Directors [riaa.com]. They had revenues of 3 billion dollars last year and a market cap of 2.7 billion. They are considered one of the "Big Four" (EMI, Sony-BMG, Universal Music, and Warner) music publishers responsible for 95% of all music CDs sold worldwide. The Big Four were convicted (along with some smaller players) of price fixing and forced to settle with 43 states attorney generals in 2003.

So Edgar Bronfman, Jr. is the CEO of one of the Big Four music publishers, part of a proven price fixing cartel, and one of the major controlling organizations of the RIAA, a "trade group" (i.e. cartel) that ruthlessly pursues anybody who's interests aren't aligned with the publishers.

What were you saying again?

Re:When will someone PLEASE drop the other shoe?

[Anonymous Coward]

It will have to be one hell of a revolt in order for anyone outside of the indie scene to care. A lot of the barriers people neglect to mention when encouraging indie artists to sell their wares without a big label include production, marketting, and even sales. These are things that are not cheap or easy to overcome. And the big labels have paid off just the right people to make it that much harder for you to get a disc in stores.

First off, you need a producer to produce your album. Most of the better-known producers will not work with independent artists. They want to get paid. A record label makes this happen. I know, you could go find some up and coming producer. But good producers are few and far between. Recording on your computer in your basement is one thing, but you NEED someone with production knowledge to make a coherent product(something a lot of indie musicians tend to gloss over).

As far as marketting goes, sure the internet makes this easier. But people still have to know you exist. This means product placement, advertising, etc. Showing up in a Google search doesn't exactly push you into the limelight. You need to learn the tricks of the trade. And why should you have to? You're a musician, not a marketting major. You're going to need help. And it's going to cost big bucks.

Third, and most importantly, unless you plan on selling CDRs on Amazon or digital downloads via itunes or some other service, you're going to need to press discs professionally and find a store to sell them in. Most production plants will not work with indie bands who are not on a label. They will flat out refuse you. It's part of their under-the-desk deals with the bigger labels. It's collusion. Maybe it's conspiracy too. But that's the way it is. The same goes for stores and shelf space. Sales chains will not work with anyone but a major label. Shelf space isn't cheap, and they want sure-sellers. The big labels can guarantee this(via payola marketting or whatever).

Take it from someone who has been part of the "business" for some time now. It's a very cut-throat business. And the big labels have poised themselves to control the whole thing via back room deals in much the same way Microsoft gained dominance in the OS market. While the internet poses a great threat(or rather, WILL someday), it is still in its infancy as far as what it is capable of in the grand scheme of things. The labels know this. And they won't take it laying down.

Content without variable pricing

[lysergic.acid]

"There's no content that I know of that does not have variable pricing,"

Except for music/movie rentals and movie theater tickets. Are they going to start telling blockbuster that each rental CD should be individually priced?

Say it ain't so

[mr_rattles]

We want to share in those revenue streams
I'm sorry but how is that not greedy?

And as a consumer I think $.99 for every song is MUCH better than a variable pricing scheme. I can buy any song knowing it's only going to cost me a buck and don't have to worry about that random $3 song that I otherwise would not have bought.