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The music business has called on the mobile industry to simplify handset interfaces or risk losing out on a $32 billion music download oppor…

3GSM: Edgar Bronfman Jr, CEO, Warner Music GroupThe music business has called on the mobile industry to simplify handset interfaces or risk losing out on a $32 billion music download opportunity over the next three years. Warner Music Group CEO Edgar Bronfman Jr said the consumer downloads experience was “expensive, it’s complicated and it’s slow”. In a 3GSM keynote session, he said mobile players must respond by making it easier to get tunes onto cellphones.

WMG’s Q4 digital music revenue was up 45 percent, but Bronfman said: “It’s amazing we’ve generated as much revenue as we have through mobile music, given how cumbersome the experience can be. Just imagine what we could do if it were fun and seamless. Music has the potential for explosive growth, [but] only 8.5 percent of [customers with music-enabled phones] use these phones to buy music. So far, we’ve re-engineered the very way we create music content. But to be frank, we often get very frustrated because user interfaces are really quite inadequate and so many of the world’s platforms are still not capable of handling even the most basic content configurations – a ringtone or an audio track, for example.”

He continued: “The average ringtone download session is two and a half minutes and takes 20 clicks. If you could make that two or clicks, 20 seconds … the ability to unlock revenue for us and for carriers is really extraordinary.” Bronfman said silos currently prevent listeners from getting their mobile music easily. But the current opportunities do not come along often, he said: “As partners in this industry, we need to do everything we can to change that. Our central challenge is to make it affordable, easy and quick to download. Until we achieve that, we are not just falling short of potential … we’re also leaving billions of dollars of revenue potential unrealized.

Announcements: Bronman used his keynote to announce a partnership with Egypt’s Orascom that will deliver music-based content to consumers in 16 countries across the Middle East and North Africa, while it will also link up with independent multimedia venture O Media Holdings, he said. Bronman also announced a partnership with Telenor to deliver music via the Norwegian telco’s mobile networks including in southeast Asia. He said Bangladesh presented an opportunity because, whilst it currently only has 1 million fixed-line phones, Telenor would have 50m customers there by 2009.

On music experience: Warner Music’s own challenge is to reinvent the music experience, to take it far beyond just a song or a ringtone. We need to create a constant flow of product and information, not just an album every two years, so consumers can stay connected to their favorite artist via their favorite carrier.

On iPhone: “The iPhone has effectively raised the bar in terms of what consumers expect in terms of user interfaces on their mobile phones and what mobile phones should be able to do as music players and entertainment devices. While this certainly presents challenges, it’s ultimately a positive development. As a result of the iPhone announcement, consumers, the people we serve, are getting very excited about music phone devices. Now it’s up to other manufacturers and providers to meet these new customers’ hopes and expectations and to fulfill this emerging demand. For those who invent with a similarly inspiring vision, the opportunity is immense.”

On DRM: “We believe very strongly in interoperability. I hope the music industry will make it as easy as possible to achieve interoperability. Intellectual property deserves some degree of protection. I don’t agree IP should have no protection, I would also say you should not have so much protection you create a poor experience for consumer. We need to balance those two factors to come up with something that works for both communities.”

  1. Bronfman turned a 2.5 billion dollar company into a 1.5 billion dollar company in less than 2 years. Would love to hear more wisdom from this guy. Can I get you to send it to my competitors?
    thanks

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  2. jbv,

    It is even worse….WMG was about $4.4B (mid 2006) and is only $1.05B as of today… which of course further makes your point.

    But as usual (and of course) some executives and many early backers already cashed out so it's not like they care that much these days.

    Here's to the small investor!

    MR

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