Nettwerk Bullish On Online Retail, Bearish On RIAA Lawsuits
July 17, 2008 at 3:29 PM (PT)
While the transition from brick-and-mortar retail to digital seems to be slow, yet inexorable, NETTWERK MUSIC GROUP is diving headlong into an aggressive campaign to generate optimum digital revenue. PAIDCONTENT.ORG quoted reported that NETTWERK MANAGEMENT CEO TERRY MCBRIDE told a music industry convention in LONDON that his artist AVRIL LAVIGNE will make about $2 million in royalties from plays on YOUTUBE, and that labels should cut the price of digital tracks to optimize revenue.
His suggested price point: 25 cents per track and $2 for albums. "You'd see a huge shift [in business]," MCBRIDE said. "We haven't even given kids the choice to show us this tipping point yet ... the profit margin in the digital space is about 300 percent that inside the physical space. Today’s generation don't want to own (music), they want to have access to it when and how they want it,"
NETTWERK's innovative online distribution strategies has helped it generate over 70% of its revenue online, compared to a predicted 25% online revenue share globally. Yet McBRIDE has been a fly in the ointment of the RIAA, as he has donated to the legal funds of those being sued by the RIAA for filesharing. "Today’s generation don't want to own (music)," he said. "They want to have access to it when and how they want it."
McBRIDE is now ready to jump into the piracy-rife markets in ASIA. "We will start a Mandarin website (for LAVIGNE) with Mandarin ads and we will make a shitload of money, because 40% of her intellectual property value comes from ASIA," he said. "[In] the Asian culture, music is owned by no-one and is shared by everyone. The West has viewed CHINA’s use of free music as piracy, but the Chinese have been sharing free music for thousands of years."