WMG Call: Bronfman: We're Not Doing As Bad As The Rest Of The Music Industry

Edgar Bronfman, Jr., Warner Music Group's Chairman and CEO, began the call offering a set stats designed to show how the company is outpacing the rest of the music industry?or at least doing less worse. However, major successes came from albums by Frank Sinatra and Madonna, not exactly rising young artists. Online digital front, ringtone revenue remains small and was flat in Q2, especially in Europe and the U.S., but Bronfman has expectations that mobile revenue growth will grow soon as western consumers have been gradually adopting the portable music listening and purchasing habits that are entrenched in Japan.

In terms of other experiments designed to grow digital, Bronfman pointed to Jason Mraz's albumWe Sing. We Dance. We Steal Things. The album release was preceded by sales of bundled tracks over three months. Ultimately, WMG was able to offer two versions of Mraz' album on iTunes, with the premium release eventually outselling the basic one on Apple's ( NSDQ: AAPL) download store. WMG is also working with Nokia ( NYSE: NOK) on its "Comes With Music" feature, which is slated to launch later this year and Bronfman is hopeful about the benefits. He also emphasized short-term business deals for digital to maintain flexibility and see what works and what doesn't.

-- Not playing games: Bronfman calls current video game licensing fees on a per song basis "paltry for video games, such asGuitar Hero. But the actual royalty derived from the use or download of individual songs remains far below their true value. Unless there is a real partnership among game marketers and artists and labels, WMG will be hesitant about going further to license its music for video games.

-- All digital cost structure: The potential of Nokia's plans to include music on handsets before their sold has huge potential, Bronfman said. "But we'll have to wait at least a year to see what the results are." Asked about when will WMG have an "all digital cost structure," Bronfman said that the company is closing in on the day when digital is 50 percent of the balance sheet.

-- Amazon (NSDQ: AMZN) and iTunes: Bronfman said that Amazon's sales are largely additive to iTunes. Interestingly, Amazon seems to sell more full albums, whereas iTunes is more about singles.

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