We just want to do business. We are signing as many deals as possible. — Jorge Mejia, Director New Business Sony/ATV, USA
With someone from the publishing arm of Sony and another from the label Warner Music Group there’s been some interesting points on dealing with the big music companies… a fair bit of defensive claims that they really are interested in working with the mobile industry and dealing with as many people as possible… it seems a lot of people have a different impression.
There was agreement that aggregators pretty much created the ringtone industry. “Aggregators were the ones who built this from the ground up,” said Jorge Mejia, Director New Business Sony/ATV, USA. “We are ready to move forward with you guys now that mastertones are becoming more widely available. My main message and the reason why I’m here is that we want to do business with all of you.” That being said, Mejia stated that “essentially, we as publishers control the rights to the underlying composition which the artists record…songs are the reason why music exists”. So they’re willing to work with the mobile industry, but only on their terms.
And what are they? Helpfully, Alfonso Perez-Soto (the media director for US latin and Latin America Warner Music) provided a list:
— They have to agree with the economics, which will vary depending on the service that will be offered. Economics coming down to how much the label will get paid. For different services “we fill find flexibility and we will try to find room for aggregators to keep working with us”, he said.
— The artist and image has to be treated well. WMG will balk at something it considers to be in bad taste or overly sexual. Basically, anything they think shouldn’t be associated with the artist brand will be rejected.
— “When you are selling our artist it has to be a red carpet service”, basically because it affects the image of the artist. If you provide a bad service (customers don’t receive downloads, or are billed twice or any of the other complaints that plague the business) Perez/Soto isn’t interested in doing business with you.
— WMG requires very accurate reporting. “We are in this business because we pay royalties (to artists and publishers)” he said, so transparency is very important.
— Digital rights management. It will surprise nobody that the labels insist that the content is strongly protected/restricted. “If our content is not protected…we cannot strike a deal.” WMG is going with WMA 1.0.
— WMG also looks for added value, it’s interested in talking with aggregators which add value or have a unique proposition.
There are some holdups for mobile music in LatAm (mobile music is only a significant market in Brazil, Mexico, Argentina and Chile), and these can be seen in the obstuctions to launching full-track downloads in the region. Perez-Soto said WMG is ready to launch full track downloads in Latin America but there is a problem with carriers infrastructure — while some are ready to go others are still working on 2G networks.
Another big issue is DRM — WMG is “still waiting for feedback” on its insistence that distributors of its content use the WMA 1.0 DRM technology. On the sensitive issue of pricing, how much to charge for downloads and what percentage of that will go to the labels, Lopez-Soto would only say “pricing is still under discussion”. Although Latin American consumers may be less willing to spend as much money on content as those in the US or Europe there is one advantage — legal music in those countries (at least in Mexico) is still expensive compared to the US and Australia (in that it costs more in US dollars). There have been some recent “bargain bins” which brings some music down to $10 per album, but there is probably still a strong demand for reasonably priced singles…preferably in the iTunes range but probably also in the current US mobile music range. Of course, it is still competing with pirated music…
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