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Warner To End Free Streaming of Its Content 278

Posted by kdawson
from the moment-of-silence-in-the-stream dept.
eldavojohn writes "If you have a license to stream content for free from Warner, be aware: Warner has announced plans to cancel streaming licenses. Major sites such as Last.fm, Spotify, and Pandora may be affected — Warner has not yet spelled out whether streaming restrictions will apply to existing licenses, or only to future ones. Warner's CEO Edgar Bronfman said, 'Free streaming services are clearly not net positive for the industry and as far as Warner Music is concerned will not be licensed.' You might contend that Warner gets a cut of the ad-based revenue these free streaming sites take in. While true, Bronfman contended that this revenue comes nowhere near what they need in compensation for each individual's enjoyment of each work. The article quotes spokesmen for other labels who disagree with Warner's stance, however. Music's digital birthing pains continue."
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Warner To End Free Streaming of Its Content

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  • by rotide (1015173) on Friday February 12, 2010 @10:07AM (#31112360)

    Say I had a bunch of bits on my server. Say those bits were recorded from people with talent and "permanently" placed on my server. I also have the right to sell those bits to whomever wants them.

    The best part here, if you want to buy my bits, I send you a duplicate copy at next to no cost to me. Now you sell those bits or make money in/directly from them, I get a cut.

    Now say a site out there wants to stream my bits to non-paying customers, but, I could see _some_ revenue from advertisements your site runs. How is this a bad thing for me as the bit holder? How is this hurting me?

    Sure, I could let others stream my bits and get more money from them as they might have higher profit yielding business models. But in the end, site y streaming my music with advertisements isn't really going to hurt my profit from site x that charges an up-front fee (radio is unreliable if you want to hear x and y songs).

    I guess my open question, to the recording industry is, if you can stream your bits to everyone and expect _some_ compensation from each, why wouldn't you want _everyone_ to start offering your products at whatever profit they can gleam for you?

    If you're worried about piracy, well, that boat sailed a long time ago.

    Profit is profit. You're not making a physical object that costs you x dollars. You're allowing others access to your bits that cost you next to nothing to duplicate (although, I know it costs _something_, it will be a lot less than physical items).

    Obviously, that was rhetorical as the Recording Industry will never respond to me. But my own conclusion comes out as simple control, or at least their own illusion of control.

    *Paying* Pandora Member/Customer

  • I use Spotify a lot. But there's one huge problem: If Big Content pulls out then Spotify will wither and die. And if they do then my playlists, which contain the most valuable information for me, are also doomed. This is huge problem.

    If I spend countless hours listening to music and discovering new artists without the ability to export my playlists in some open format (just the metadata, not the songs themselves), I'd get totally pissed if I can't access them any more. So as long as Big Content is threatening to pull out of these services (which apparently still pay more than radio from what I've heard) I'm not inclined to pay. I can always get the tracks themselves through some other service, but only if I know which they are.

    I wish they would just friggin stop shooting themselves in the foot, and stop treating customers like the enemy. But I'm too idealistic, I guess...

  • Re:What they NEED? (Score:5, Interesting)

    by sznupi (719324) on Friday February 12, 2010 @10:09AM (#31112396) Homepage

    Worse, he claims there to know the level of individual enjoyment from Warner music; and how much it is worth.

    To which I would like to say - I decide that. And from now on, Warmer music isn't worth listening to me.

  • by GTarrant (726871) on Friday February 12, 2010 @10:10AM (#31112406)
    I like this line..."Bronfman contended that this revenue comes nowhere near what they need in compensation for each individual's enjoyment of each work" - it's a complete summary of the way the labels are thinking. Each time you do something - anything - that resembles enjoyment, their feeling is that somebody - somewhere - should be getting money from you. If you're thinking about a song but it isn't being played, in his mind, you owe for those few seconds. Consider that this is an industry that sells you a ringtone, then says you owe extra money when your phone rings because you just broadcast music in public. Stunning.

    I guess the question is, what amount of money would he say is the right amount of "compensation" for each individual's enjoyment of each work? Because very few of these streaming services are making much money at all, and while I know executives in his industry have the feeling of "If we cut off access, people will pay us 100x more to listen to it! They'll be dying to listen to our music!" (how well did that work for online newspaper sites that decided to go behind a paywall?), the reality is, most people I know that enjoy listening to Pandora or last.fm would be perfectly fine if everything of Warner just dropped off it - they'd just continue listening to whatever it serves up on the various stations they've created and enjoy. They certainly wouldn't start paying big bucks to a Warner Music Station. The labels have tried that, they lose their shirt every time.
  • by Rennt (582550) on Friday February 12, 2010 @10:31AM (#31112642)

    Exactly. The value of your product is whatever the market decides it is worth. Turns out that for streams of bits this value is "not much".

  • by headkase (533448) on Friday February 12, 2010 @10:54AM (#31112966)
    The whole point is that computers are unreliable. They eat things. Steam will retransmit a 6GB game as many times as you like even though you only bought it once. That's customer service: I'll buy from Valve in the future. But a tiny little 5MB aac file? Too much to retransmit? I'm not stupid, I can see you don't truly value me even if you think you do. In addition: the competition is free. And like I said: in a few years I'll have the heart again to try to convince my niece to throw her money away again. Perhaps by then she'll have learned the system administration skills to back up her system as well.
  • by Asic Eng (193332) on Friday February 12, 2010 @11:04AM (#31113076)
    I can re-sell the CD collection if there is neither fire nor flood.
  • Re:See! (Score:5, Interesting)

    by commodore64_love (1445365) on Friday February 12, 2010 @11:18AM (#31113266) Journal

    This is nothing new. These industries fought the grammophone, because nobody would buy sheet music anymore. As it turned-out, they were right but the loss of sales from sheet music was more than made-up by sales of cylinders and discs.

    Then they fought the invention of FM radio, because they feared people would no longer listen to music on the AM stations. Again they were correct, but AM survived as the source for news and dialogue.

    Now they are fighting digital streaming because they fear it will hurt FM radio and sales of discs. And again they're probably right, but they can still make a *lot* of money from internet ads and direct sales.

    They need to stop being afraid of the future. Technology changes but they will still have a place to sell their warez.

  • by digitalhermit (113459) on Friday February 12, 2010 @11:34AM (#31113494) Homepage

    These things -- bottled water, diamonds, and music -- have much in common. The vendors of these products have created an artificial demand for a plentiful product. We are told that diamonds are exceedingly rare. When someone invents a process to manufacture flawless diamonds, we are told that only "natural" diamonds are proper tokens of affection. Bottled water is the same. We pay more for a gallon of water than for a gallon of high grade 93 octane gasoline. The same with music. There is no shortage of great music. Sure, there are local bands that just suck, but there are many of better talent than the few who the industry highlights.

    Imagine if every slashdotter just replaced the contents of their music device with some local, unsigned, or "open" bands just for a few weeks. Play only that music. Print the lyric sheets. Learn the songs.

  • by theotherbastard (939373) on Friday February 12, 2010 @12:04PM (#31113946)
    I forget where I read this, but it was pointed out that the reason WB may be doing this is that they (WB) fear that sites like Pandora, etc. devalue each track. When a consumer can listen to it for free (0 cost to the consumer) they are less likely to see the value in purchasing the track themselves. (99 cents from the consumer)
  • by Tikkun (992269) on Friday February 12, 2010 @12:21PM (#31114246) Homepage
    ...can make sense, if you make it competitive to other options available to consumers.

    If you're charging $5-$10 a month to download 100s of DRM free mp3s per month that can be easily synced with mobile devices you may have a model on your hands. Want 1000s a month? Want 1000s a month and FLAC? $20 and $30 a month respectively.

    The labels could make this work because:

    1. People like novelty. Publish a great song this month? People stay subscribed.
    2. People like feeling like they aren't being taken advantage of. Being able to stop at any time and keep the tens of thousands of tracks you've downloaded removes the fear of joining in the first place.
    3. People like having their friends know what they like. Syncing up "official" subscriber downloads with social networking sites helps show who the "true" fans are.

    Of course anything Warner does will suck, have horrible design, have tons of DRM and only work on Windows.
  • by tweak13 (1171627) on Friday February 12, 2010 @12:36PM (#31114458)
    I have no idea what this article is talking about. The source is apparently an interview with BBC news, so I'm wondering if this is something that only applies to Britain or maybe Europe in general.

    In the US we have a fantastic little organization called SoundExchange. You may remember them from previous stories on slashdot about how they were trying to destroy internet radio by charging massively inflated prices. Part of the reason it was big news is because in the US internet radio broadcasts fall under a compulsory license. Even if you're an independent artist who is not represented by any of the labels that SoundExchange represents, broadcasters must pay SoundExchange to play your recordings.

    Warner is in the same situation, and cannot opt out of this no matter how much they want to. They could make specific agreements with each and every internet radio station, but all the stations would have to do is say no. If no agreement could be reached it goes right back to the standard terms of SoundExchange.

    I'm not an expert in licensing, but I do work for a radio network that also broadcasts on the internet. During the big SoundExchange debacle last year this is how everything was explained to me. I highly doubt any internet radio service in the US will be in trouble.
  • by Anonymous Coward on Friday February 12, 2010 @01:18PM (#31115158)

    Except you can't, in all locations, get away with legally making those copies.

  • by Belial6 (794905) on Friday February 12, 2010 @01:31PM (#31115318)
    Because with a CD you have 'Purchased' a physical item. The downloads are just a 'License' to play the music. A fire, flood, or hard drive crash does not destroy the license.
  • by Anonymous Coward on Friday February 12, 2010 @01:46PM (#31115560)

    This is a digital product. Drawing analogies to physical media shouldn't apply; digital media is unique and should not be constrained by this kind of logic.

    Also, your logic resembles the label's logic... remember when a Sony spokesperson said you should pay for each digital copy you use, and used the example of a computer, ipod, and phone, each of which you should pay $0.99 to legally play songs on? Their logic was that "you can't play songs from a CD on multiple devices at the same time, so why should you be able to with a digital copy?" If you agree with that... well, I can't really argue further.

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