Phones need better music interface: Warner Music

By Sinead Carew

NEW YORK (Reuters) - Wireless operators and cellphone makers need to make it easier for consumers to listen to music on handsets to tap the full potential of the market, Warner Music Group (WMG.N: Quote, Profile, Research, Stock Buzz) Chief Executive Edgar Bronfman said on Friday.

Bronfman told the Reuters Media Summit in New York that current user interfaces for downloading and buying musical ringtones and songs to cellphones were "sub-optimal."

"I do think that frankly, at least as important as finding the right retail price point for consumers, is for the telephone companies and handset manufacturers to create a seamless, easy user interface," Bronfman said.

"Until that happens, frankly I don't think we can tap the dramatic potential that exists ... I think that's coming, and coming rapidly, but it can never be too soon," he said.

The executive said that Warner Music derives about half of its digital music revenue from sales of wireless products such as musical ringtones. For the fiscal year ended September 30, it posted digital revenue of $355 million.

Bronfman sees a lot of growth in services that give consumers the ability to simultaneously buy concert tickets and screensavers related to the music they are buying.

Warner sells such service bundles through Japan's KDDI Corp. (9433.T: Quote, Profile, Research, Stock Buzz) and hopes to launch in the United States.

"We hope to have something like that relatively soon" in the United States, he said.

Bronfman also said wireless in China, where music piracy is rife, may be the best way for Warner to make money. Warner already has a deal with China Unicom Ltd. (0762.HK: Quote, Profile, Research, Stock Buzz), he said.

Wireless operators have spent so much money building networks to support music downloads that they have a strong financial interest in making sure that consumers legally purchase songs and ringtones for their cellphones.

"In terms of the music industry ... we think that our best avenue for monetizing the Chinese market really is through the mobile operator," he said.

"I think the first place you'll see increasing revenues for the music industry ... in China really is on the wireless platform."

(For more coverage of the Reuters Media Summit, please see our MediaFile blog at blogs.reuters.com/mediafile)