After blowing $33 million, mostly on equity investments in music streaming sites imeem and lala, Warner Music is done with making similar venture capital investments in digital startups, CEO Edgar Bronfman said on today’s earnings call.
He continues to hope, however, Warner Music will see more revenue from its joint venture with MySpace Music and that someone will figure out how to effectively monetise streaming videos.
Here’s more of what Bronfman said on WMG’s investments in imeem and lala, MySpace music and music videos online:
- On imeem and lala: Those investments have not met WMG’s expectations, and those companies have a very different valuation now than they did in 2007 when WMG first took stakes in them.
- On MySpace Music: The site has “disappointed [Warner Music] so far.” Bronfman noted that it’s been slow to transform its massive audience into signifcant revenue and stressed that that “needs to change,” but he’s hopeful that with the site’s new management, that will happen.
- On music videos: Much like with MySpace, Bronfman noted that sites like YouTube have a lot of traffic but aren’t generating much revenue for their content providers, including the record labels, a situation that he said “can’t continue for anyone in this economic environment.” He praised Universal Music’s forthcoming YouTube video channel, VEVO, calling it “a very positive direction for the music industry.” (Does this mean WMG might soon hop on board?) But he did say that in order for a streaming music video service to be effective, it would have to provide more opportunities for the labels to monetise their content than just giving them a better cut of advertising revenue. Bronfman also argued that keeping Warner Music’s videos off of YouTube had a (presumably positive) affect on the label’s digital revenue this quarter.
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