Friday, August 04, 2006

Time Warner: How to Kill Two Birds

Normally, I would post Op/Ed over on my blog: THE TENSION. However, I have decided to move any music/entertainment related posts over here to the EXCHANGE.

So Warner Music is losing CD sales and they think consumers will buy (probably higher priced) music DVDs?

Right. Here's the rub on the Bros of Warner:

First, Time Warner decided to kill off the last remaining ironclad revenue stream by offering free AOL to the remaining 20 or so million paying subscribers who live in the fly-over zone. Only idiots would dump 20 million customers who pay an average of $20 a month for a service. AOL has the credit card numbers are already on file and automatically charge to bill. How many business owners dream of that kind of success? But hey, AOL destroyed their road map to golden glory when they hired Bob Pittman and allowed him to talk them into the AOL - Time Warner merger.

Now, Warner Music is trying to combat CD sales, which are falling because of digital downloads for portable music devices, by offering even more hard product.

Huh? Say What?

What makes the Warner wonks think that folks will buy music DVDs when what consumers want is cheaper music?

The way to win battles against iTunes and other download services is to offer CDs at prices lower than the downloads. Then, folks would have a reason to buy CDs and simply rip them for personal use to their iPods. The low-price plan wouldn't be that hard to do, either. Given download prices at around a buck a song, Warner could offer new CDs at $7.99 and make a killing in volume. Perhaps the powers that be balk at the idea folks could legally rip the songs to their iPods.

Oh well.

Warner Music looks to DVDs as alternative to CDs
(CNET) -- Warner Music Group is planning to start releasing music on DVDs, bundling songs with extras such as videos, ring tones and photos, according to a published report.

Time Warner Reports $1 Billion 2Q Profit
NEW YORK (AP) -- Time Warner Inc. swung to a $1 billion profit in the second quarter and released details Wednesday of a long-anticipated plan to offer many AOL services such as e-mail for free.

AOL Co-Founder Offers Merger Apology
NEW YORK (AP) -- AOL co-founder Steve Case has offered a qualified apology for his role in architecting the online company's disastrous combination with Time Warner Inc. "Yes, I'm sorry I did it," Case said on PBS's "The Charlie Rose Show" last Friday

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