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 Amazon.com (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.