Case in point: Warner Music Group, which yesterday took a $33 million write-down on its $35 million (combined) investment in LaLa and iMeem, two social music discovery sites, as noted by PaidContent.
Particularly disappointing has been MySpace Music.
He's not the only one. CNET News recently reported, "At a MySpace Music board meeting last month, the company's CEO, Courtney Holt, got an earful from several music label representatives" unhappy about the lack of money they're making.
Yesterday in its earnings call, News Corp. (MySpace's corporate owner) admitted that MySpace costs have risen 7% in large part due to the rollout of music, but ad revenues are down 16%. However the company thinks it has a bright future.
"I think MySpace Music is less than six months old and has a tremendous amount of traffic," president/COO Peter Chernin said on a conference call with analsyts and media.
Warner's Bronfman seemed optimistic about Vevo, the new musicvideo portal that Universal Music is launching with the support of Google's YouTube.
"Any premium video model is going to have to include very significant monetization opportunities above and beyond advertising in order to be effective," he said bluntly.
Charging for music videos?