Wednesday, May 11, 2005

Tone-deaf at Yahoo, dumb at Warner

Yahoo gets in on the online music subscription action. I'm not optimistic for them. I just don't believe in the rent-a-tune business model because I don't believe people want to spend time and money downloading songs only to lose them at some point in the future.

What's interesting is that the subscription approach is being pushed by record companies. With a subscription, "consumers are more likely to sample songs from relatively unknown artists, a phenomenon that helps the industry create more moneymaking stars...[and] the record labels might gain more negotiating leverage to pressure Apple into renting songs instead of simply selling them." That's right. It's all about re-making the iTunes store. Record labels are helping push a method of music distribution that consumers really haven't asked for so they can change a service consumers really do want. Yeah. That'll work.

Meanwhile, Warner Music dropped its initial public offering price then saw their stock slide more during first-day trading. Seems investors aren't eager to hand Warner $500 million when the company has already announced that only $7 million of it will actually go to promoting and growing the business. Hmm. I guess THAT'S the way to create more moneymaking stars!

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