Bronfman, You Hypocrite
Edgar Bronfman Jr., the CEO of Warner Music Group, recently took a moment to attack Apple's Steve Jobs for the 99-cent pricing of music downloads in the iTunes Music Store. According to Bronfman, "Not all songs are created equal -- not all time periods are created equal. We want, and will insist upon having, variable pricing."
What? Bronfman singing the praises of "variable pricing"?! Lest anyone forget, he was at the helm of Universal Music Group back when it (along with all the other major labels) was engaged in a scheme of price fixing aimed at keeping CD prices high.
And Bronfman apparently doesn't think that "variable pricing" might include lowering the price of some tracks below 99 cents. Said Bronfman, "Some songs should be $0.99 and some songs should be more." So what he meant to say is "we should be raising our wholesale prices and preventing people from discounting."
This was, of course, exactly the aim of MAP price-fixing scheme that Bronfman's former label, Universal, was running in the late '90s.
In the age of P2P file sharing, raising your prices and alienating your best retailers (not to mention fans!) is a recipe for disaster. Perhaps Bronfman is not the best CEO for a record label trying to find its way into the 21st century.
Correction: It turns out that the Red Herring article did not carry Bronfman's full comments. According to the Hollywood Reporter, Bronfman went on to say, "That's not to say we want to raise prices across the board or that we don't believe in a 99-cent price point for most music. But there are some songs for which consumers would be willing to pay more. And some we'd be willing to sell for less."
Of course, the fact remains that the guy calling for "variable prices" today is the same one who backed MAP yesterday. It would be interesting to ask whether he continues to believe that MAP was good for consumers.