Warner Goes Shy on Music Startups
Warner Music Group has had mixed experiences with investing in music startups; losing out heavily on their purchase of Imeem and Lala, and their bad experiences look like preventing them from investing in any other online startups. Their spokesman Stephen Bryan, during a panel at Midem, pointed out the difficulty of trying to run a company subsidiary with opposite interests to its owner. Imeem and Lala were attracting customers with as much music as possible for as little investment (whether that be in terms of ad views or dollars paid), while WMG was concerned to make as much money for each stream or download of every song in their catalogue. A reluctance to find themselves in this ‘stuck in the middle’ position again and the money they burnt means that they profess reluctance to own any more services.
Bryan did state that they’re very happy with their relationship with Spotify, which is going from strength to strength in terms of both users and advertising revenue. The less likely WMG is to invest in new services, the better Spotify will be pleased, as Warner will be more likely to channel all their efforts into promoting their content with their part owned partner.