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may 21, 2007:
warner music cuts staff 15% in u.k.
time to face the truth – unlock the music!

From the Telegraph UK: “As part of WMG’s ongoing transformation to a music-based content company, we are realigning WMUK to most effectively organize our resources,” the company said Friday. “The music industry is undergoing fundamental changes, and we are adapting our business accordingly, channeling our resources into growth areas, managing costs, and investing in new business initiatives.”

One has to wonder why Warner Music (WMG) just does not seem to have the guts to do what needs to be done to remedy their “shrinking pie” problems. Well, let me summarize this for you, again:

1. Sell music in an open format that works on all devices, with flexible pricing (meaning both more $$$ and less $$$!), and in bundles/subscriptions/packages. Make music ubiquitous, sell it everywhere, anytime, to anyone, bundle, package, re-package – take a page from Amazon. The key is to make your music available widely, and without all the ifs and buts, and with open and fair licensing standards.

2. Offer fair agency-like deals to new artists, make them (and their managers!) more responsible for their own success, and take a nice percentage of all revenues that flow from the artist’s brand. Move beyond music as the single moneymaker – it’s a multimedia world now, right? – and please get off the “selling copies” paradigm and into selling access and services. Make a larger pie instead of quarreling over who gets what of the quickly shrink- ing pie you think you still have.

3. Reduce marketing costs by 60% by diving head-first into viral syndication of your content – let the users, the fans, the listeners do your marketing for now. Give up the pipedream of total control over distribution and get new revenues flowing again.

First of all, it’s time to admit that you were dead-wrong about DRM, about taking your customers to court, about trying to force the music fans and your own users into submission – and then get ready for a new flood of revenues. And yes – you may need to slim down to 30–50% of your current size, and get people onboard who know what’s real and what’s not. Engage, not enrage.