Music and entertainment are central to peoples lives, so it will be essential to mobile—Michael Nash, Warner Music
The New Media panel had some pretty heavy hitters...Michael Nash from Warner Music, John Smelzer from Fox Interactive Media, Larry Shapiro from WDIG, Thomas Hesse from Sony BMG and the moderator was Paul Vais, from Apax Parnters. There was some interesting chat about communities, and using mobile communities as a distribution channel. Thomas said that community was critical for the distribution of music, but the industry still needed to work out how people would buy from communities. John demonstrated that he “got it”: ”We’re going to be going into community for its own sake and not as a distribution channel.” Selling things via community sites always has to come secondary (or further down the chain of importance) to the actual community aspects, otherwise the people will leave, and there’ll be no more community. John also thinks that distribution through communities will begin on line, and the mobile aspect will just follow that.
The companies are also very clear on the idea that they are planning on continuing to work with the carriers. Michael pointed out that everyone in the value chain needs to be realistic. “Clearly, space needs to be made in the distribution of our revenue so that the programming...and application layer in the middle can prosper,” he said. “I think the people have to be realistic about margins. There should be room in the value chain for everybody that brings real value… Entertainment content is critical to revenue, critical to obtaining subscribers and retaining subscribers.”
The subject of MVNOs came up, without a lot of enthusiasm. “Even with the value of our content in our partners business, that doesn’t mean we have to be in their business,” said Michael, while Thomas said he was doubtful about the viability of running an MVNO for every little niche market. That makes sense, of course. People like music but their tastes are too eclectic to support an MVNO.
Paul said that he had looked at a lot of business plans for MVNOs (Apax Partners being a venture capital firm). “There’s a lot of ways to combust vast amounts of capital and you won’t know if it’s going to work until it’s smoke,” he said.
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