Excerpts from Warner Music Group’s fiscal third quarter 2008 earnings call transcript:
Edgar Bronfman, Jr., Chairman of the Board, Chief Executive Officer: “In December, we began offering DRM free audio downloads on the Amazon MP3 digital music store, which allows every track and album purchased to be playable on practically any digital music device, including iPods. Extending this strategy, Warner Music has announced a series of MP3 deals in recent months, with partners who have agreed to support our product management strategy and product innovation initiatives, including Walmart, Napster, and Seven Digital.”
Michael D. Fleisher, Chief Financial Officer, Executive Vice President: “Overall, total quarterly digital revenue grew 39% to $166 million, or 20% of total revenue, up from $119 million or 15% of total revenue in the prior year quarter… Approximately 65% of our total digital revenue was generated in the U.S. and 35% in the rest of the world. Online continues to be the primary growth driver of our digital business globally, while mobile remains soft in the U.S. with flat ringtone sales.”
Bronfman regarding the videogames Guitar Hero and Rock Band: “I think what we need to be very careful of is that the recorded music industry and the music publishing industry do not allow an ecosystem to occur where we are not properly compensated. If I use the analogy of MTV 25 years ago, or even Apple five years ago, those are two ecosystems that from whom people other then the recorded music have derived the majority of the value created in that ecosystem. That I think is the state we are currently in with Activision and Harmonic where the amount being paid to the music industry, even though their games are entirely dependent on the content we own and control, is far too small. And I think the industry as a whole needs to take a very different look at this business and participate more fully and in a much more partnership way with both our artists and with the games’ manufacturers than is currently the case. And if that does not become the case as far as Warner Music is concerned, we will not license to those games… The actual royalty derived for the use of the song or the royalty derived from the download of the song remain in my estimation far below what their true value is.”
Bronfman on the disparity between digital as a percent of total revenue in the US (32%) vs. international (15%): “I don’t think there is anything structural other than timing as a large part. I guess I would say a couple of things. One, wireless is a more — is a much broader model in Europe for Internet access rather than online. iTunes, which has led the digital business in the U.S. was first introduced here several years before it was introduced in Europe, number one and number two, is much more of an online business than a wireless business, so you have a sort of structural issue which is much less online access in Europe versus the U.S. and therefore, less iTunes buying because of the nature of the Internet access model in Europe, A, and B, iTunes’ introduction in Europe is several years behind the introduction in the U.S.”
Full transcript here.
[Thanks to MacDailyNews Reader “JES42” for the heads up.]
Middlebronfman seems to forget who signed those contracts with Apple et al. (he, or someone that he authorized, did) and that Warner Music would have come up with the original MTV, Apple’s iPod+iTunes, or Guitar Hero / Rock Band on the first Tuesday after never.
Sitting around with your thumb unavailable, signing what you consider to be bad contracts after someone else creates and builds wildly-successful ventures and then whining and moaning that you suddenly “deserve” much more money from them is so typical of these music cartel slime buckets (see that old washed-up bag Doug Morris from Universal Music for another example).
They’re nothing but filthy, greedy vultures forever circling in quest of golden geese.
Not one mention of what artists deserve, need or want. It’s always all about the stock prices and the management bonuses.
…”with partners who have agreed to support our product management strategy and product innovation initiatives, including Walmart, Napster, and Seven Digital.”
Product innovation?
“Online continues to be the primary growth driver of our digital business globally, while mobile remains soft in the U.S. with flat ringtone sales.”
Let me rephrase this: “We are growing the most where the pricepoint was created with regard to how much the consumer wants to spend. We are flat in the area where our greedy asses set the pricepoint.”
“I think what we need to be very careful of is that the recorded music industry and the music publishing industry do not allow an ecosystem to occur where we are not properly compensated.”
Let me rephrase this, too: “We could TOTALLY have bungled this up, too, had we been given the chance.”
“Bronfman regarding the videogames Guitar Hero and Rock Band: “I think what we need to be very careful of is that the recorded music industry and the music publishing industry do not allow an ecosystem to occur where we are not properly compensated. If I use the analogy of MTV 25 years ago, or even Apple five years ago, those are two ecosystems that from whom people other THEN the recorded……….”
The maroon doesn’t even know the difference between ‘then’ & ‘than’. He probably went to a California college, maybe even graduated.
Indy is where it’s at anyways.
@ Ron
Best one heeds the adage: “people in glass houses should not throw stones,” or “look before you leap.”
I believe you meant, “moron”.
“And I think the industry as a whole needs to take a very different look at this business and participate more fully and in a much more partnership way with both our artists and with the games’ manufacturers than is currently the case.”
Yes, what you need to do at this point is to collude with other content owners so you don’t get “screwed” by low-balling for scraps on new businesses that you are grudgingly dragged into. Because anit-trust issues could only help your fortunes now.
@ DanielM
Maroon is the spelling as used by Bugs Bunny in an old ‘Warner Brothers cartoon…
Bugs Bunny: “What a maroon.”
These a$$holes have 50 years of bilking musicians out of their money, and now free market economics threaten their stranglehold. Of course they are going to cry, there are other services out there willing to get musician’s product to market for lesser margins. Sorry, that’s just the way business is.
@ DanielM
Expand your knowledge – MarOOn (not ‘moron’) is a CARTOON saying you’re obviously unaware of.
Bugs Bunny said it thousands of times. Tiny Toons characters used it over and over again.
It’s in the lexicon. Just not YOUR lexicon.
“Expand your knowledge – MarOOn (not ‘moron’) is a CARTOON saying you’re obviously unaware of.”
‘what a nin-cow-poop!’
ron: The “then” and “than” mistake was probably made by the person who wrote the transcript of the phone call.
This man speaks to obfuscate, not to communicate.
That’s why he gets the big bucks.
“This man speaks to obfuscate, not to communicate.”
Kind of the norm in USA since Fox news and the Republicans got in bed together.
“…the recorded music industry and the music publishing industry do not allow an ecosystem to occur where we are not properly compensated.”
I agree, but only if the “we” he refers to are the artists.
Actually, no. The ‘We’ he refers to are actually the upper management echelon of WB Music. He has no interest in artist compensation, as they are only the necessary nuisance for his existence.
“Approximately 65% of our total digital revenue was generated in the U.S. and 35% in the rest of the world.”
I wonder how much was from the iTunes Store.
“Kind of the norm in USA since Fox news and the Republicans got in bed together.”
A match made in Hades.
Why don’t the record companies show some innovation and come up with some ideas on their own.
Sitting around a boardroom somewhere in America…
*snort* *snort* *raises head* *sniffles*
“…they pay us far too little…”
“yea Edgar, this coke is overcut too”
*heads lower* *snorting continues*
Bite me,
Kate
(Proud Republican)
Bite me,
Kate
(Proud Republican)
These guys are just impervious to reason and common sense. Maybe it’s time to get rid of the record companies…
DanielM is a maroon. I love it when people try to sound superior and they end making an fargin ice-hole out of themselves. Keep it coming!
thumb unavailable??? LMAO!!!!!!!!!!!!!!!!
@ DanielM
Doh!
For the record, I didn’t mean, “dough!”.