Warner Music Group is creating a new music-distribution mechanism that will rely on digital downloads instead of compact discs.
Edgar Bronfman Jr., Warner Music’s chairman and CEO, said Monday that the new mechanism will be called an “e-label,” in which artists will release music in clusters of three songs every few months rather than a CD every few years.
“We’re trying to experiment with a new business model,” he told an audience of about 150 people at a Progress & Freedom Foundation conference here. “We’re going to try to see where this goes.”
Warner Music’s move seems to be a response to the exploding popularity of music-download services and the slowly slipping sales of physical CDs. According to the International Federation of the Phonographic Industry, about 180 million songs were sold online in the first half of 2005, up from 57 million in the same period last year. Apple Computer’s iTunes recently passed 500 million downloads.
The e-label will permit recording artists to enjoy a “supportive, lower-risk environment” without as much pressure for huge commercial hits, Bronfman said. In addition, artists signed to the e-label will retain copyright and ownership of their master recordings.
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