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Goldman Sachs Communacopia: Edgar Bronfman, CEO, WMG: Labels Need Equity In ‘MTV Of The Internet’

At the Communacopia conference, Warner Music Group (NYSE: WMG) CEO Edgar Bronfman reiterated the message he sent Monday yesterday at Convergence 2.0: the music industry is not dying, but needs to develop new business models and get away from the simple sale of recorded music. Once again, he stated his company’s plans to do more in areas like touring, fan clubs and artist management. He was asked about the role of the music label in a world where social networks provide a ready-made avenue for artist promotion. In this regard, Bronfman contends labels are best positioned to manage an artist’s use of social networking channels.

As for recorded music sales, Bronfman is hopeful that iTunes will finally see some competition from the likes of (NSDQ: AMZN) and Wal-Mart; he also mentioned free music site LaLa, which has a relationship with WMG. He said that in retrospect, the labels might have been smart to demand an equity stake in the iPod/iTunes business and that it would be a mistake for the “MTV of the internet” to emerge without strong participation (an ownership) from the labels.

Asked why the labels hadn’t built their own download site, a la Orbitz in the travel industry, Bronfman said he didn’t see any good reason to get into retailing, which is not only a low-margin business, but not a strong suit of the record labels.

One Response to “Goldman Sachs Communacopia: Edgar Bronfman, CEO, WMG: Labels Need Equity In ‘MTV Of The Internet’”

  1. For Artists…

    If you are trying to figure out where the music industry is going, it would be nuts NOT to believe you could glimmer something from the direction of a major label.

    I read the Bronfman speach and translated it with some advice.
    Excerpt from my translation / interpretation:

    Bronfman: "to create an ongoing, connected experience between artists and their audiences…"

    Translation: Warner is tired of seeing sites like MySpace profit from the connected experience their artists deliver to fans via MySpace. It's time to move on to a platform where the experience can be improved, controlled, and most importantly, it's time to move onto a platform that can deliver new revenue streams back to the label and the artist.

    … continued…