- The music business is better off now than in the heydays of the 1980s and 90s, predicts the former Warner Music chairman.
- After years of struggles, music is "is back to a healthy growth," says Edgar Bronfman, Jr. "It's the most compelling consumer content."
The explosion of subscription streaming music has the potential to open up the broadest audience the industry has ever seen, predicted former Warner Music Group Chairman Edgar Bronfman Jr.
"I think ultimately music is better off as a subscription or a streaming model than it was even in the '80s and '90s, when we were selling albums," he told CNBC's "Squawk Box" on Thursday.
Under the streaming model, Bronfman acknowledged each consumer may spend "a little bit less than fanatics who were buying albums." But he argued it "broadens the distribution base" and sets up the industry for new heights.
The music industry was the first major content producer to be decimated by the internet, starting when peer-to-peer file sharing started taking hold in the late 1990s. Napster wasn't the first, but it became a wildly popular destination for people to download free music, before an avalanche of copyright complaints led to its closure in 2001.
In 2003, launched the iTunes Store, allowing consumers to buy individual songs. Meanwhile, and later Spotify were attracting audiences to their streaming music platforms. Apple launched its own subscription streaming service two years ago.
Bronfman said the music industry was the first to deal with the disruption of unbundling.
"This unbundling is precisely what's undoing a lot of the media business plans and business models," he said.
After years of struggles, he added, music is "is back to a healthy growth." But he warned the industry is not out of the woods.
"The artists do make more of their money on the road these days. Spotify complains that it pays too much to the content companies. And content companies aren't making a whole lot of money," he said.
"I think this is a fixed-cost model and until that subscription model grows further, it's going to be tough to turn a lot of profits," he acknowledged.
However, Bronfman said he feels the timeless and nostalgic nature of music will see the industry through.
"People think back and have a soundtrack to their lives. And songs mean stuff to people," he said. "In a way, it's the most compelling consumer content."