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Middlebronfman: First MTV, then Apple, and now ‘Guitar Hero’ and ‘Rock Band’ pay us far too little
Friday, August 08, 2008 - 04:26 PM EST

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.]

MacDailyNews Take: 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.

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Aug 08, 08 - 03:36 pm Comment from: Big Al

Not one mention of what artists deserve, need or want. It's always all about the stock prices and the management bonuses.

Aug 08, 08 - 03:36 pm Comment from: DRM sucks

..."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."

Aug 08, 08 - 03:37 pm Comment from: ron

"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.

Aug 08, 08 - 03:38 pm Comment from: Mac-nugget

Indy is where it's at anyways.

Aug 08, 08 - 03:47 pm Comment from: DanielM

@ Ron

Best one heeds the adage: "people in glass houses should not throw stones," or "look before you leap."

I believe you meant, "moron".

Aug 08, 08 - 03:48 pm Comment from: FILMflam

"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.

Aug 08, 08 - 03:57 pm Comment from: Bugs

@ DanielM

Maroon is the spelling as used by Bugs Bunny in an old 'Warner Brothers cartoon...

Bugs Bunny: "What a maroon."

Aug 08, 08 - 03:59 pm Comment from: NCIceman

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.

Aug 08, 08 - 04:00 pm Comment from: Cartoonasaurus

@ 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.

Aug 08, 08 - 04:08 pm Comment from: shen

"Expand your knowledge - MarOOn (not 'moron') is a CARTOON saying you're obviously unaware of."

'what a nin-cow-poop!'

Aug 08, 08 - 04:10 pm Comment from: Aaron

ron: The "then" and "than" mistake was probably made by the person who wrote the transcript of the phone call.

Aug 08, 08 - 04:20 pm Comment from: Passerby

This man speaks to obfuscate, not to communicate.

That's why he gets the big bucks.

Aug 08, 08 - 04:37 pm Comment from: poo

"This man speaks to obfuscate, not to communicate."

Kind of the norm in USA since Fox news and the Republicans got in bed together.

Aug 08, 08 - 04:40 pm Comment from: Macromancer

"...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.

Aug 08, 08 - 04:47 pm Comment from: Predrag

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.

Aug 08, 08 - 04:49 pm Comment from: Sir Gill Bates

"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.

Aug 08, 08 - 04:52 pm Comment from: Sir Gill Bates

"Kind of the norm in USA since Fox news and the Republicans got in bed together."

A match made in Hades.

Aug 08, 08 - 05:04 pm Comment from: Cubert

Why don't the record companies show some innovation and come up with some ideas on their own.

Aug 08, 08 - 05:14 pm Comment from: RavIng MacHead

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*

Aug 08, 08 - 05:16 pm Comment from: @poo & Sir Gill Bates

Bite me,
Kate
(Proud Republican)

Aug 08, 08 - 05:18 pm Comment from: Jake

These guys are just impervious to reason and common sense. Maybe it's time to get rid of the record companies...

Aug 08, 08 - 05:33 pm Comment from: Bugs

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!

Aug 08, 08 - 05:36 pm Comment from: Goople

thumb unavailable??? LMAO!!!!!!!!!!!!!!!!

Aug 08, 08 - 05:41 pm Comment from: The Truth

@ DanielM

Doh!


For the record, I didn't mean, "dough!".

Aug 08, 08 - 05:43 pm Comment from: DanielM

Didn't bugs say, "What an ultramaroon!"

And isn't maroon a racial slur to describe escaping slaves in the West Indies?

Aug 08, 08 - 05:57 pm Comment from: Lurker_PC

You know what I'm curious about that the record companies don't mention often (thank goodness) is the potential impact of the used CD market. I purchase a fair number of used CD's compared to digital downloads and new CD's. Although, I do try to purchase new CD's for artists that I really like or are just starting out. But I have no heart burn purchasing used CD's for multi-millionaire singers and / or for older groups - for example, the Eagles Greatest Hits I purchased used.

Peace.

Aug 08, 08 - 06:10 pm Comment from: Sir Gill Bates

"Bite me,
Kate
(Proud Republican)"

Well, OK Kate, but I get to pick the location.

Aug 08, 08 - 06:19 pm Comment from: Sir Gill Bates

DanielM,

"And isn't maroon a racial slur to describe escaping slaves in the West Indies?"

These escaped slaves had to subsist only on coconuts while on the run. They were nicknamed with the Swahili word for coconut, which was 'macaroon'. This word was later used by the Girl Scouts of America to name a cookie to honor blacks. The proceeds from these cookies are today used for the advancement of coconuts around the world.

Aug 08, 08 - 06:22 pm Comment from: Sir Gill Bates

Cubert,

"Why don't the record companies show some innovation and come up with some ideas on their own."

'Cause they're lazy and stupid?

Aug 08, 08 - 06:27 pm Comment from: Growl

If you read Bronfman's statements closely, you realize he's barely coherent. Seriously, quite a few things he says leave me scratching my head wonder what on earth he meant. I think he's like Dilbert's boss, he just throws out buzzwords that give people the impression that he has a clue what he's talking about, but when you read it closely, you realize he's a complete moron.

"people other than recorded music" - Recorded music is a person?

And that whole section about wireless vs. online? WTF is he trying to say? I wouldn't have been at all surprised to read that quote attributed to Senator Ted "Tubes" Stevens.

And that quote yesterday about how Warner needs to "compete with" Apple's iTunes...what the hell? Why do you "compete" with a retailer whose selling more of your music than any of your other retailers are?

This guy needs to go. He's stuck in the '90s and refuses to acknowledge that the world has changed.

Aug 08, 08 - 07:16 pm Comment from: m159

How is it legal for him to give Amazon DRM-free music and not Apple? It's preferential treatment intended to weaken the better competitor and favor the one who agrees to serve the label rather than the consumer.

Aug 08, 08 - 07:24 pm Comment from: Al

Edgar comes from a fine family of distillers and whiskey smugglers. He knows thieves when he sees them. He just has to look at the family album for reference.

He thinks that everyone is a thief because everyone he knew as a kid was one. That's why he thinks everyone, artists, retail outlets, business partners, consumers and even staff are robbing him blind.

Speaking as a consumer, you're absolutely right Edgar. We are ripping you off, pun intended.

Aug 08, 08 - 08:16 pm Comment from: scott

Bronfman uses or misuses the word ecosystem without a clue as to its real meaning. Look it up Edgar

Aug 08, 08 - 08:48 pm Comment from: HMCIV

I have to take Bronfman's side on this one. Warner needs all the money they can squeeze out of Activision, Apple and MTV. It will continue to take decades of mass therapy and hundred of millions of dollars to repair the psychological damage Warner execs caused themselves and others by giving Paris Hilton a music contract.

Aug 08, 08 - 09:01 pm Comment from: HMCIV

@Sir Bill Gates

The proceeds from these cookies are today used for the advancement of coconuts around the world.

Sir Gates, that was BRILLIANT.

Aug 08, 08 - 09:11 pm Comment from: pablo

I agree with Daniel. I think Ron made a "typo". And I think that Aaron is right. Words use unconventionally usually are indicated as so via notation (italics, etc), [removed]hand movements, etc), or voice inflection (long, long vowels). And, Bugs, I never saw Bugs Bunny spelling anything on TV. So I am not sure how he would have "spelt" it out smile

LULL (Liten up & laff laudly) cool smile

Aug 08, 08 - 09:54 pm Comment from: ron

I meant maroon. It's a net way to say moron.
I left an English school and home at 16. I could always spell. I love words. I had to learn to spell again after coming to the USA to make my fortune. Thanks America. God bless the USA.

Aug 08, 08 - 09:55 pm Comment from: ron

Yes. I meant 'net'. You know, the internet.

Aug 08, 08 - 10:01 pm Comment from: Sir Gill Bates

HMCIV,

Thanks. You know the saying about the blind squirrel ...

Hey, speaking of Paris Hilton, did you see her challenge to McCain and Obama? It's pretty cute. She's still a skank, but a funny one.

http://www.funnyordie.com/videos/64ad536a6d

Aug 08, 08 - 10:11 pm Comment from: Sir Gill Bates

ron,

Thanks for coming and God bless you.

Aug 08, 08 - 10:17 pm Comment from: Riddler

It is likely the the good folks that created Bugs Bunny MEANT to create a disparagement as to only 'get close to' insulting someone, on TV — hence MAROON.

Perhaps those that never, or rarely, watched Bugs and the gang, are mistaking the character with the speech impediment as Bugs. It was not.

Insisting that it was, would be FUD. When it was actually FUDD.

And FWIW, 'ron' may have 'meant' MORAN (get a brain, look it up), but he would have some case of dyslexia to 'mean' — moron — yet type, maroon.

Aug 08, 08 - 10:33 pm Comment from: zek

It is morally bankrupt to pay money to these low-life. It is your duty to rip and mix and share until they are forced to work for a living, doing something useful to society.

Aug 08, 08 - 11:31 pm Comment from: KingMel

@Kate: You are only entitled to be a proud Republican if you never voted for Bush, detest presidential signing statements that exclude the Executive branch from having to follow the law in question, and abhor the Administration's double-speak and policies on torture that have dragged this nation into the toilet. Otherwise you are just another Republican.

There, now I have contributed to the political side of the MDN forum life and I can get back to computers, video, music, pictures, etc.

Aug 08, 08 - 11:38 pm Comment from: Hill Billy

"detest presidential signing statements that exclude the Executive branch from having to follow the law in question,"

Hill Billy Clinton, America's most degraded and amusing President for some time remains the reigning king of signing statements. But the President can write whatever they like in a signing statement, they still have to follow the law.

Aug 08, 08 - 11:43 pm Comment from: PC

"The proceeds from these cookies are today used for the advancement of coconuts around the world."

"Sir Gates, that was BRILLIANT."

Yes, I can imagine where you come from, racial slurs are funny.

Aug 09, 08 - 05:42 am Comment from: How Soon Dumb Democrats forget

"Hill Billy Clinton, America's most degraded and amusing President for some time remains the reigning king of signing statements. "

Hill Billy was also fond of the illegal Line Item Veto, at least until shut down by the Supreme Court in Clinton v. City of New York. But then Hill Billy didn't have a lot of respect for the law.

Aug 09, 08 - 08:32 am Comment from: Missy Pants

Bronfman:
"People who hum and/or whistle, pay us far too little."

Aug 09, 08 - 08:54 am Comment from: Asmodeus

Democrat. Republican. Both suck. You can argue about them all you want and get absolutely nowhere, but there is no difference between them anymore.

-Asmodeus, who is a true patriot because he PAYS HIS FUCKING TAXES. Everything else is just bullshit.

Aug 09, 08 - 10:30 am Comment from: Sir Gill Bates

Hill Billy,

"But the President can write whatever they like in a signing statement, they still have to follow the law."

Too bad G.W. Bush doesn't consider the Constitution "the law".

Aug 09, 08 - 10:34 am Comment from: Sir Gill Bates

PC,

"Yes, I can imagine where you come from, racial slurs are funny."

I regret and renounce my crude and offensive statements which have apparently upset and offended at least one of our fellow forum members. This was not my intent and I apologize from the bottom of my heart to any and all coconuts.

Aug 09, 08 - 10:39 am Comment from: Sir Gill Bates

Asmodeus,

"-Asmodeus, who is a true patriot because he PAYS HIS FUCKING TAXES. Everything else is just bullshit."

I assume you are referring to the taxes that are automatically withheld from everyones paycheck. Wouldn't that make us all true patriots?

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