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Lyor Cohen Talks On 360 Deals, iTunes Pricing And Why YouTube Deals Do Not Pay

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After being brought in to drive efficiencies at the Warner Music Groups roster of labels in 2004 Lyor Cohen (now Chairman & CEO Recorded Music at WMG) has certainly delivered with WMG gaining 2.2% increase in market share in 2008. Reinforcing this is the fact that Atlantic records became the No#1 label in the United States during the same period.

Cohen has according to Billboard, and “aggressive advocate” for artists and labels to reap the benefits of the digital space. This has including withholding Kid Rock’s album from iTunes to maximise sales potential as well as also coming up with many other digital products. Accordingly, Atlantic records now state that they receive half of its revenue from digital products.

On the issue of labels receiving a fair price for their music, Lyor has been pushing the debate head on. At least Apple is now opening up its offering to allow labels more flexible pricing. Cohen also states “we are years into the iPod experience and [he] thinks consumers are savvy…. it’s very hard to explain to Jimmy Page why “Stairway to Heaven” is 99 cents and Chumbawama is the same price.”

However I think most TMV readers will agree that Apple needs to open up its walled garden and address flexible pricing of music as well. Labels want it, artists want it and most importantly music consumers do see different value levels and they know the difference between catalogue and new artists. Generally speaking TMV believe consumers are willing to pay more for new up and coming artist than old school catalogue artists form the 60s, 70, 80s and beyond.

On WMG pulling out its deal with YouTube Cohen stated that WMG “haven’t received enough compensation”. TMV believes this has resonance across the digital space, as most new models simply do not value music content, as they should. We ask the question where would all these new business models that rely on music content be without the content?

When discussing 360 deals Lyor states they are “for [them] they typically involve new artist signings. [They’re] not interested as much in doing 360 deals where an act is fully established”. As predicted by TMV in our 2009 predictions post, major labels will continue aggressively pressing for 360 deals in terms of new artist signing.

On the issue of ISPs and government pressure for them to make deals with content owners Lyor is direct in that he believes that labels have not done enough in terms of protecting there content. In TMVs view 2009 will be the year in that there was a; realignment in terms of ISPs and protection of content.

On a final note in terms of executives that believe artists do not require major labels, Lyor is clear that he thinks it is “…personal decision for the artists. There are certainly arguments that speak to an artist taking on more risks, if they can afford to take more risks on. [He] thinks labels are important because they help strategize, pull together resources and mobilise hundreds of people to make it happen and cut through the clutter.”

All in all it is obvious Lyor has delivered for the WMG and has some string and positive views in terms of content and empowerment.

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