WMG’s Bronfman: MySpace Music ‘Disappointing,’ Vevo Must Charge Users, No More Online Investment


Warner Music Group (NYSE: WMG) won’t be buying stakes in more web music services any time soon, after it wrote off $33 million on Thursday against its investments in Lala and Imeem. CEO Edgar Bronfman Jr. told analysts on the earning’s call: “We do not intend to make more digital venture capital investments. The intention was to (invest in) young companies pursuing innovative business models. Some of these digital venture capital investments have not met expectations. It makes sense to recognize the very different valuations these companies are receiving in the current economic environment.”

WMG had invested $20 million in Lala and $15 million in Imeem, but is also writing off an expectation that it would receive $4 million from Imeem specifically. The write-offs doubled WMG



The problem is that subscriptions are also a very limited model. Back in 2001, everyone said subscriptions would save the web world and it didn't happen. It is called subscription fatigue. Why pay to listen to music online when you can just go to your iPod.

David Lewenz

It is amazing to watch companies invest in dreams, not business models, the future of digital on line will be with firms that have Multi revenue streams, while just having advertising revenue is a good start, with streaming video it will not pay the bills, as You Tube has demonstrated. Subscription sales will play a key roll in a company’s ability to be profitable along with new technology.


As of now, any investment won't be reasonable if there's no future growth in it. There are so many things that should be consider before engaging to any venture. In this way, this can avoid waste of time and money.

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