Apple 2.0

Covering the business that Steve Jobs built

Warner Music's Bronfman Changes His Tune

November 15, 2007: 9:07 AM ET

picture-1.jpgWarner Music Group CEO Edgar Bronfman, Jr., who once likened Napster to slavery and Soviet communism, made headlines today with a mea culpa in which he confesses that he -- and the music industry -- was asleep at the wheel. (see below)

The billionaire song-writer and sometime Broadway and Hollywood producer (who inherited a fortune from the House of Seagram and lost much of it) even had kind words for Apple (AAPL) -- despite launching verbal grenades at the company and its CEO for more than two years.

A few choice quotes from Chairman Edgar:

Sept. 25, 2005. Responding to Steve Jobs' complaints that "greedy" music companies were fighting 99ยข song pricing:

There's no content that I know of that does not have variable pricing. Not all songs are created equal -- not all time periods are created equal. We want, and will insist upon having, variable pricing.

We are selling our songs through iPod, but we don't have a share of iPod's revenue. We want to share in those revenue streams. We have to get out of the mindset that our content has promotional value only. We have to keep thinking how we are going to monetize our product for our shareholders. We are the arms supplier in the device wars between Samsung, Sony, Apple, and others. (link)

Feb. 9, 2007. Responding to Jobs' call for lifting DRM (i.e. copy protection) on music:

The notion that music does not deserve the same protections as software, television, films, video games, or other intellectual property simply because there is an unprotected legacy product available in the physical world, is completely without logic or merit.

We advocate the continued use of DRM in the protection of our and our artists' intellectual property. The issue is obscured by asserting that DRM and interoperability is the same thing. They are not. To suggest that they cannot co-exist is simply incorrect. (link)

Nov. 14, 2007. At the GSMA Mobile Asia Congress, asking for help selling songs via cellphones:

We used to fool ourselves…We used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding. And of course we were wrong. How were we wrong? By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find, and as a result of course, consumers won. (link)

For years now, Warner Music has been offering a choice to consumers at Apple's iTunes Store the option to purchase something more than just single tracks, which constitute the mainstay of that store's sales. By packaging a full album into a bundle of music with ringtones, videos and other combinations and variation we found products that consumers demonstrably valued and were willing to purchase at premium prices. And guess what? We've sold tons of them. And with Apple's co-operation to make discovering, accessing and purchasing these products even more seamless and intuitive, we'll be offering many, many more of these products going forward. (link)

According to AppleInsider, the Bronfman went on to praise Apple for its "beautifully designed" iPhone which includes "brilliantly written software." It has a "spectacular user interface" that "throws all the accepted notions about pricing, billing platforms and brand loyalty right out the window."

Full text of Bronfman's speech available here: EBJ Macau 3GSM speech FINAL 11-07.pdf

Join the Conversation
About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

Email | @philiped | RSS
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.