August 31, 2005

Warner Music Group To Form Digital Label

Mercury News: Warner Music Group has announced plans to form a digital label, tentatively named Cordless, which will release songs exclusively for download over the internet or to mobile phones. It's a belated adaption to the decline of the album... not necessarily the CD, I think. As the article points out most albums have no more than three hit tracks, with the rest being regarded as "filler" by all but the die-hard fans and are simply there to justify the album price. With the advent of individual downloads people are less willing to pay for an album when they just want a single song. This affects the way the new label will do business....
"An artist is not required to have enough material for an album, only just enough to excite our ears,'' Bronfman said in his speech. "Rather than releasing an album every couple of years, every few months the label will release 'clusters' -- three or more songs -- by an artist.''
It will see a wider range of music too: "Warner's e-label will be headed by noted music figure Jac Holtzman, a technophile who pushed early adoption of the compact disc, the LaserDisc and now can be spotted in Warner's New York offices with a flash drive dangling from his neck. Since his e-label starts with modest production budgets of about $30,000, rather than millions, Holtzman is free to sign more eclectic acts, like Devo bassist Jerry Casale's new group, Jihad Jerry and the Evildoers." (via Ringtonia)
Related stories:
Apple & Record Labels Square Off
Can Cell Phones Save the Music Business?
Universal Music Group Gets A PhoneOf Its Own

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August 22, 2005

Warner To Launch "E-Label" Warner Music Group is creating a new online music-distribution mechanism that will rely on digital downloads instead of CDs. Edgar Bronfman Jr., Warner Music's chairman and CEO, said Monday that the new mechanism will be called an "e-label," in which artists will release music in clusters of three songs every few months rather than a CD every few years.
He was speaking at a conference...The e-label will permit recording artists to enjoy a "supportive, lower-risk environment" without as much pressure for huge commercial hits, Bronfman said. In addition, artists signed to the e-label will retain copyright and ownership of their master recordings.
InfoWorld: After years of bickering over issues such as government-mandated copyright protection technologies, it's time for the technology and entertainment industries to come up with new ways for content creators to be paid for their work if they want payment, Bronfman said during his speech in Aspen.

"Let's not hurt our credibility by blindly following party lines," he said. "Clearly, content and technology both need each other and can benefit from each other."

His full speech is here, as a PDF

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August 15, 2005

Mix & Burn Kiosk Adds Sony and WMG

Release: Mix & Burn, which has recently launched its music kiosk "Digital Music Filling Station" as a beta, has launched a new version with music from Sony BMG and Warner Music Group.
Upgraded kiosks allow retail customers to purchase, download and play major label content directly on portable devices compliant with WMP10.
The Mix & Burn listening and CD burning system is currently being tested by a number of major retailers.

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August 09, 2005

Earnings: Warner Music Digital Rev Up 26 Percent; Reps 6 Percent Of Total

Revenues were higher -- up 2 percent to $742 million -- but Warner Music Group, still paying for its IPO and other items, turned in a net loss of $179 million for the company's FY3Q05. (Adjusted loss for non-recurring and other items was $35 million.) Digital continues to be the best story WMG has to tell, as Chairman & CEO Edgar Bronfman, Jr., stressed in the earnings release for WMG's FY3Q05: "In the most advanced digital market place - the U.S. - we are encouraged to see digital gains outpacing the physical business." (Not sure I agree that the U.S. is the most advanced but that's another story.)
Overall, digital revenue hit $44 million for the quarter -- six percent of total revenue; that represents increases of 26 percent of the previous quarter and 76 percent over FY1Q05. Digital music led Recorded Music to a two-percent increase - just as double-digit online revenue increases are helping newspaper publishers eke out single-digit increases this quarter. Recorded music operating income was $6 million for FY3Q05 -- excluding IPO and other non-recurring costs -- it would have been $32 million, up 33 percent from $24 million in the same quarter last year.
Digital revenue brought in $6 million for Music Publishing -- pushing it to 4 percent of that unit's revenue from 3 percent in FY2Q05.
Earnings release | Webcast replay

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June 14, 2005

EMI & Universal In Digital Formats Pact

MarketWatch: This one is sure to raise some regulatory eyebrows: Universal Music Group and EMI Music Publishing have reached agreement on a pact that will include the introduction of new digital products, formats and service offerings in the U.S. and Canada. The agreement covers the distribution of music videos across several platforms, including VOD, video download services and the DualDisc format.
It also includes ringtones and ringbacks on mobile phones; albums and tracks that can be purchased online; and multi-session audio discs.

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Profits and Revenues Up For Warner Music

Warner_musicnzherald: Yesterday, Warner Music Group (which raised $554 million in its initial public offering on May 10) issued its first quarterly report as a public company, announcing net income of $4 million in the second quarter, contrasted with a loss of $48 million during the same period last year. Revenue also rose 4.4% to $767 million with both Recorded Music (up 5 percent, to $621 million) and Music Publishing contributing to its growth. The company stated that a weak dollar and improved sales of digital music helped narrow its second-quarter loss. Revenues were bolstered from an $18 million increase in favorable exchange rates as well as improved digital revenues of $35 million (4.6% of total revenue) - which were actually greater than the $32 million achieved during the full fiscal year 2004 despite a $30 million decline in worldwide CD sales...However, Warner's shares fell nearly 3 per cent on overall weakness in the music industry - down 48 cents at $16.47 in afternoon trade on the New York Stock Exchange trade. In addition, Warner's distributor of independent labels showed an improvement for the quarter. Full financial details for the quarter can be found in the company's current Form 10-Q, filed with the SEC.

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June 02, 2005

Warner Music Sued Over Royalty Dispute

Yahoo: Third Story Music, an LA based music publishing firm filed a federal suit against Warner Music Group on Tuesday , alleging that singer-songwriter Tom Waits has been shortchanged on the sale of digital downloads. Waits was apparently entitled to higher royalties of either 25% or 50% from revenues derived from third-party licenses and Third Story maintains that royalties from digital music downloads should be included at the higher rate. According to the article, Third Story sent a formal notice in February questioning the accuracy of royalty statements to WMG. The music company replied a month later that "downloads are sold to customers such as iTunes and just as physical product is sold to Best Buy and Virgin."

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