French streaming service Jiwa has withdrawn Warner Music’s catalog and asked for its users to make donations to support the service, a disclaimer on its Web site reads.
The removal of Warner catalog follows an order by the record company, Jiwa co-founder Jean-Marc Pflueger tells Billboard.biz. Pflueger explains that Warner declined to renew its contract with Jiwa, which ended in December 2009. Launched in March 2008, Jiwa had the four major companies on board until now.
While Pflueger acknowledges a delay in paying Warner, he says “they took advantage of it to end their business relationship. Warner International is at war with the [ad-supported streaming] model.”
On Feb. 9, WMG chairman and CEO Edgar Bronfman, Jr. said Warner repertoire would no longer be licensed to free streaming services.
Warner declined to comment further than saying the company pulling its catalog from Jiwa is not related with Bronfman’s statement. Billboard.biz understands Warner got paid by Jiwa only after a judge’s injunction, which might explain its reluctance to extend the deal with the service.
Pflueger says advances demanded by major companies to license their catalog do not allow a viable business model for any digital music service.
While he says Jiwa’s turnover for 2009 was of €300,000 ($409,000), he unveils the advances required from the major labels: €400,000 ($545,000) for Sony Music, €250,000 ($340,000) for EMI, €180,000 ($245,000) for Universal, all for a year, and €100,000 ($136,000) for Warner for 18 months.
“As [with] any [digital music] platform in France, we lose money!” he says, adding Universal’s advance is the only one that got recouped in 2009. Although he says his company is not in danger, Pflueger confirms they asked their users to make donations to support them. “This was more to send a message than to gather revenue,” he comments.
Pflueger says the Web radio business, which represents half of Jiwa’s traffic, is profitable. He hopes a viable solution for on-demand streaming will come from government-backed mediation by Emmanuel Hoog, a former president of national audiovisual institute INA, on digital licensing.
