Warner Music's Hitting a High Note

Though they still make up just 6% of all music sales, digital music purchases more than tripled in the first half of the year, according to estimates by the International Federation of the Phonographic Industry released earlier this week.

For starters, Bronfman would like to change the balance of what the music labels get paid for and what they give away. He says that 20 years ago the industry gave music to MTV and made that business successful, and that has more recently been the case where iPods are concerned. "We're selling our songs through iPods, but we don't have a share of iPods' revenue," he said. "We have to keep thinking about how to monetize our content for our shareholders where we've been creating value for so many other streams."

Bronfman expects to have agreements in place with Yahoo! (YHOO Quote), Microsoft's (MSFT Quote) MSN and Time Warner's AOL for music videos, and he expects to share in the revenue. That applies for ringtones and other content "across all channels," he said.

One such battle is likely to take place on the satellite front. Bronfman says the music industry essentially financed satellite radio's introduction and gave satellite radio a seven-year license at "vastly below market rates in order to allow that business model to occur. It has been six years, and it is now time for satellite radio to pay market rates for content," he said.

"There's no reason in the world, in my view, that satellite should have its content costs be one-tenth of what everyone else is paying, and have that specifically be on the back of the music industry," Bronfman added.

Naturally, piracy issues are still at the forefront of most discussions about the future of the industry. Bronfman says that he was very happy with the Grokster decision and that legitimate distribution will grow and grow, though the industry needs to remain vigilant.