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Bronfman: Spotify is a real and growing revenue stream

Written on:January 31, 2012
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Warner Music Group Chairman Edgar Bronfman, Jr. is a big fan of Spotify. In fact, at the D:Dive Into Media conference, the music mogul touted the music streaming service as a complementary service on top of other sales channels.

In what is likely his final interview before leaving Warner Music, Bronfman defended Spotify’s ability to drive more value for artists and labels. “Everywhere we look, Spotify is incrementally positive,” Bronfman said. Later in the discussion he noted that the streaming music startup is “a real and growing revenue stream.”

That said, Bronfman noted that part of the success comes from a deal that Warner Music helped to negotiate that passed on more value to labels and artists. “They have Warner Music to thank for a much better economic deal. We insisted on a much stronger deal and refused to sign unless we got that deal,” he said.

In addition to adding additional incremental revenue to the music industry, Bronfman said that Spotify’s model also provides longer-lasting value than some of the other offerings on the market, because consumers access music for longer periods of time than during the usual sales cycle.

“It’s important to note that [Spotify] has a much longer shelf life than downloads,” he said. “In Spotify, a song can live in the streaming world for a long time.”

Bronfman was not as keen on other platforms for distributing music. For instance, unlike all the other major labels, Warner Music doesn’t participate in streaming video service Vevo. “We have a fundamentally different strategy,” Bronfman said. “Vevo aggregates artist content and accrues that value to something called Vevo… We aggregate our content and accrue that value to our artists.”

As for Google Music, which Warner Music also doesn’t participate in, Bronfman said, “Google has to decide if it wants to have a content platform and if it wants to have a platform that’s competitive with other content platforms.”

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