Spotify, which offers ad-funded free streaming and premium subscription services, said that Warner Music Group is not pulling its repertoire from the free service.
Although it has not issued a statement, the Swedish and U.K.-based company posted the following message on Twitter: “To be clear WMG is not pulling out of Spotify. Media is taking things out of context”.
The comment follows the Feb. 9 WMG earnings call, when chairman and CEO Edgar Bronfman, Jr. said: “Free streaming services are clearly not net positive for the industry. And as far as Warner Music’s concerned will not be licensed. So this sort of get all the music you want for free and then we maybe we can – with a few bells and whistles move you to a premium price strategy is not the kind of approach to business that we will be supporting in the future.”
Bronfman had expressed disappointment with the performance of ad-supported services during an earnings call in May 2009. During the MidemNet digital conference in Cannes last month, Stephen Bryan, WMG’s SVP of digital business development, also outlined his worries.
“The concern on the ad-supported side is obviously to make it engaging enough to have an opportunity to up-sell,” he said. “We believe we should be doing more to ensure we’re not undermining the paid service by creating a service so compelling that they don’t see enough value in taking consumers to the paid service.”
Bronfman’s comments will not affect current deals that are in place, although it appears unlikely the major will license its catalog to new free ad-funded services.
Spotify is set to launch in the U.S. this year. WMG and the other majors own equity in Spotify.
