Warner Music Group may keep some music from some artists back from the iTunes Store, and appears to be playing hardball, suggesting it may withdraw permission for inclusion of some of its catalogue within smash-hit console games, Rock Band and Guitar Hero.
Rolling Stone reports the success of Kid Rock’s ‘Rock N Roll Jesus’ album, which has spawned a smash hit single, ‘All Summer Long’, and isn’t available on iTunes or through any other digital music service. Despite not being available in digital form from services like iTunes, the album has already sold 1.3 million copies.
“It’s definitely interesting that he’s the only artist that’s not available on iTunes with a monster hit right now, and we’re seeing that kind of a growth,” Livia Tortella, general manager of Atlantic told Rolling Stone.
Tortella also suggested Warner to be considering keeping other artist’s singles out of iTunes in order to spur album sales, saying the plan is being debated inside Warner Music.
It’s not a cut and dried strategy. Digital is Warner’s growth story right now, the company’s digital revenue climbed 39 per cent year-on-year, and now accounts for 20 per cent of the company’s total Q3 revenue.
With Apple now accounting for maybe 70 per cent of US online music sales, and the US being the world’s biggest music market, it’s pretty clear Warner is making money out of its relationship with the iPod company. But Warner wants more than 65 cents per track.
It’s all about the money. As reported earlier this week, WMG CEO, Edgar Bronfman Jr. accused the videogame industry of unfairly building its business on the back of the music industry.
“If I use the analogy of MTV twenty-five years ago, or even Apple five years ago, those are two ecosystems in which (companies who do not invest in creating) recorded music have derived the majority of the value created in that ecosystem,” he said.
“That, I think, is the state we are currently in with Activision and Harmonix (owned by MTV), 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,” he told analysts during a conference call.
Speaking earlier this year, Bronfman called Apple “a good friend” to the music industry, but continued his plea for flexible pricing, on the basis that not all music is created equal.
Just how far is Warner prepared to go?
Warner is pretty aggressive about getting its pound of flesh from partners – the company recently withdrew its music from Last.fm, for example.
Video games firms should probably take his warning seriously, though the long-sighted strategy it represents remains open to question.
Shares in the company fell 7 per cent this after a Goldman Sachs analyst downgraded the stock, predicting the company will find it difficult to further increase its market share.