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Warner stands by DRM as revenues plummet

updated 05:25 pm EST, Thu February 8, 2007

Warner stands by DRM

Warner Music Group has rejected the concept of abandoning digital rights management (DRM) as suggested by Apple CEO Steve Jobs in his recent open letter. The Financial Times reports that Warner chief Edgar Bronfman refuted Jobs' open letter advocating the end of DRM, attacking Jobs' statement as "completely without logic or merit" as part of the music company's latest quarterly earnings conference call. Bronfman reasserted the idea that DRM is necessary to the survival of his label's business, comparing it to the protections already in place for DVDs and computer software. Warner made the statement as the company simultaneously coped with an especially harsh decline in its financial results, reporting revenues last quarter that fell a whopping 74 percent compared to the same period a year ago, with even online-only downloads experiencing a slower than expected growth.

Bronfman publicly blamed a lack of high-profile albums and the "maturation" of the market, which could affect renewed contracts with Apple later this year. The Financial Times speculates that Jobs may point to the apparent failure of Warner's business as an incentive to switch to unrestricted iTunes songs in the forthcoming talks.

by MacNN Staff



  1. Guest

    Joined: Dec 1969


    mass extinction

    What a bunch of dinosaurs!

    I buy a *lot* of music, but this makes me want to boycott the record companies, just to knock some sense into them.

    Jobs is right -- DRM has failed miserably.

  1. elroth

    Joined: Dec 1969



    What's "completely without logic and merit" is Warner's Board of Directors keeping Bronfman as CEO, while he runs the music label into the ground.

    Since the settlement with the Beatles, Apple is now free to produce music - maybe it will eventually sign its own artists.

    I would like to see Apple take the DRM off the music from the independent labels - I don't see any reason to keep it on.

  1. Gepard

    Joined: Dec 1969


    mass execution

    He is not just an idiot, he is a real idiot.

    First of all Jobs wasn't talking about DVDs or software, he was talking about music only that is sold already on billion CDs with NO PROTECTION at all.

    Second, that is why, thanks to the greedy and stubborn labels, the very well know Russian website ALLOFMP3.COM is making huge profits by selling American and European music without any DRM protection whatsoever and much cheaper then even Apple's 99 cents per song.

  1. jdonahoe

    Joined: Dec 1969


    I have a radical idea!!

    How about forcing the music labels to allow the downloading of music from alternative sites for free if the music was already paid for at say the iTunes store. If the whole point of the argument is "I can't play my iTunes songs on my Creative player" , shouldn't the music be available in the alternative form since the record company has already profited from my purchase. If the record company's argument for DRM is fear of pirating, then they should allow the other services to provide the same song at no charge. End of problem. I'd love to hear their rebuttal.

  1. gooser

    Joined: Dec 1969


    inaccurate data

    profits fell 74%. revenues were down 13% which was only slightly worse than the industry as a whole.

  1. awcopus

    Joined: Dec 1969


    jdonahoe, cool point, but

    The truth, though, is that you're not technically buying the song. You're paying for an AAC compressed Fairplay-limited file. The 99 cents you pay entitles you explicitly to the use of that file as defined by your contract with Apple/iTunes Music Store. Also, your purchase through iTunes should not entitle you to the same song through other stores/services. Even Apple is up front about the fact that prior purchase of a song or movie doesn't entitle you to another download if your version is misplaced or damaged. Back up your music or you'll be sorry. :-)

  1. furrylogic

    Joined: Dec 1969


    Let the market decide

    Even if Apple were to license Fairplay, that doesn't mean that it would increase music sales. Consumers aren't buying music because they don't like DRM. That they are limited to iPods to play iTunes music is a much smaller issue.

  1. burger

    Joined: Dec 1969


    lots of bad music

    I see this as the "what goes around, comes around" situation.

    For years, we had to buy full albums full of crappy music to get the few songs we liked. The record companies made the big bucks on ripping us off. Now we get to buy the music we want and their profits are what they really should have been all along.

    Suck it!

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