Warner Music Group CEO Edgar Bronfman Jr. has publicly responded to the comments made by Apple’s CEO Steve Jobs last week. Jobs called the record labels “greedy” and pledged to keep iTunes prices at 99 cents. Mr. Bronfman made it clear he disagrees:
He called Apple’s across-the-board $0.99-per-song charge unfair.
“There’s no content that I know of that does not have variable pricing,” said Mr. Bronfman at the Goldman Sachs Communacopia investor conference. “Not all songs are created equal—not all time periods are created equal. We want, and will insist upon having, variable pricing.”
I actually agree with Mr. Bronfman on that point; I think there should be variable pricing. What I don’t think he’d agree with is a maximum price, and no minimum price. Just as some songs are worth more than 99 cents, some are worth less and so consumers shouldn’t have to pay a premium for them. I also don’t think any song should cost more than $2.49 – if you have a CD with only one good song, that’s a fair price I’d say. Most consumers don’t want to buy an entire album, just the songs they like – a model that the record industry is clearly not used to. I like to have an entire album, and the record labels prefer me to purchase an entire album, so I think if variable pricing actually comes to pass, there should be big discounts for users who purchase an entire album.
I disagree with Mr. Bronfman on the following point though:
“We are selling our songs through iPod, but we don’t have a share of iPod’s revenue,” he said. “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,” added Mr. Bronfman. “We are the arms supplier in the device wars between Samsung, Sony, Apple, and others.”
Um, no. The record labels sell their songs through iTunes, not through the iPod. There’s no way they should get a cut of iPod sales. And to say they are the arms supplier? Hardly! People don’t buy an iPod over a Sony player because of the music. Wake up and smell the coffee Edgar!
Read: Red Herring