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Warner boss cautious over abandoning freemium

By Chris Cooke | Published on Tuesday 12 May 2015

Pending investigations by the US Department Of Justice and Securities & Exchange Commission, it’s really just rumour that Apple has been piling on the pressure big time trying to persuade the majors to force Spotify to cut back on freemium; so to create a less tricky marketplace for those new streaming services not willing to haemorrhage cash on a free-to-use level, like, say, the all new iBeats. But let’s all agree to assume it’s true. Bloody Apple.

But hey, Warner Music boss Stephen Cooper ain’t going to make any snap decisions, however many rotten Apples are thrown in his general direction. “Before people conclude that freemium should be burnt at the stake”, he said yesterday during an earnings call, “the music industry needs to think very carefully about the consequences”.

Cooper’s input on the topic-du-jour in the recorded music game came as Warner revealed that in the last quarter, for the first time, streaming income surpassed download revenue at the mini-major. Revenues for the quarter were up 4% to $677 million, with a net profit of $19 million compared to a $59 million loss in the same quarter last year.

Cooper admitted that Warner is as keen as anyone to move as many consumers as possible over to subscription-paying services, but agreed with Spotify’s line on the role freemium plays in the wider mix: axe it over night and you’ll drive people to piracy services where there is no ad revenue and no chance of converting people into paying users.

Though, he added, he is interested in finding ways to “turbo-charge” the shift from freemium to premium, which some reckon will ultimately require cutting back some of the functionality offered on the free platforms so to enable the evolution of middle-market subscription packages that cost a few pounds a month rather than a tenner.