[USA Today]—As the newspaper with the largest circulation and readership in the U.S., USA Today not only boasts a massive subscriber base but was also the first American newspaper to launch an online subscription service.
What many people don't know is that USA Today, which covers news in 51 countries, has an exceptionally thorough and well-structured news-gathering system within its organization.
Whenever major or minor news breaks, USA Today's reporters are always among the first to arrive on the scene.
Today, however, Barry Robin—the man in charge of this system—was greeted in Los Angeles by a surprise visitor: none other than Edgar Bronfman Jr.
Without waiting for an invitation, Edgar Bronfman Jr. walked straight into Barry Robin's office, opened the cigar box on his desk, and helped himself.
Barry Robin wasn't the least bit offended when Edgar deliberately blew smoke in his face. Instead, he kicked out at him playfully and said, "Cut the crap and get to the point! I don't have as much free time as you do!"
"I signed a Premier League footballer as a singer under my label. I need your help—and don't rush to say no. Warner Music, which I acquired, has been losing money for two straight years. If it doesn't turn a profit this year, I might have to sell it."
Barry Robin, a key figure in USA Today's editorial department, was taken aback. His old college friend had never asked him for a favor before—not during his time at Universal Music, nor when he started his own business, not even in his toughest moments. For a man of Edgar's stature, this admission carried weight.
Barry understood his old friend's predicament all too well.
Under Edgar's leadership, Warner Music had been doing well financially and expanding its global music business. In previous years, this kind of performance might have sent Warner's stock soaring like Universal's once did—hitting new highs every day.
But the problem was this: Starting last year, revenue from physical CD sales had begun to decline—unprecedented and alarming.
In the Western world, if you want to grow a business, you can't escape the influence of capital.
The music industry is no exception.
Without the backing of major record labels and their investors, the "music business" wouldn't attract so many people desperate to become stars.
After all, composers and singers need to eat. If they can't make a living, how can they create?
Warner Music's situation was dire—55% of its annual profits came from record sales by its signed artists. If this year's financial report showed another decline, the capital behind Warner might abandon it entirely.
"Have you figured out the root of the problem?" Barry asked.
Edgar Bronfman Jr. fiddled with a string of Buddhist prayer beads he'd pulled from somewhere, the occasional click-clack of the beads punctuating his words: "I recently got my hands on some data about iTunes' online music sales."
"If the numbers are accurate, I think I've found the issue."
"As of July 2006, iTunes' digital music sales surpassed $10 million, with over 3 million purchases."
"And then there's YouTube—a platform with over 10 million users. Since your paper was the first to dive into online news, you might not feel the impact yet. But our entire industry is already feeling the pressure from an internet company that doesn't respect copyright."
Barry Robin immediately perked up with interest. "So the rumor about YouTube's founders selling to Google is true? Did you and the film-music associations gang up to pressure those four young guys?"
Edgar simply shrugged, neither confirming nor denying. Barry smirked—message received.
The relationship between the Western music industry and YouTube had always been… complicated, largely due to YouTube's chaotic early days.
As a hybrid of internet and television, YouTube was born with a dual identity—fueled by user-generated content (UGC), it had extremely low production costs but abysmal copyright enforcement. In its first few explosive months, YouTube was plagued by internal and external crises.
Internal struggles: YouTube was caught between TV copyright holders, viewers, and advertisers, struggling to balance their demands.
External threats: Because UGC users ignored copyright, YouTube couldn't effectively police content, angering TV networks, radio stations, and record labels.
With mounting pressure and no clear revenue model, YouTube—starved for funding—had no choice but to seek refuge under Google's wing.
"So you've got a new plan. Let's hear it," Barry said.
Seeing no resistance from his old friend, Edgar pulled a document from his briefcase and tossed it onto the desk.
"Sony Music Online has already launched its own digital music platform. For some reason, despite sinking $40 million into copyright buybacks and marketing, they've made zero splash."
"After analyzing it, I think the problem might be that Sony failed to connect with users on any meaningful level."
"Then I came across Claire on YouTube. He's… interesting. Not only is he a footballer, but he's also a musician—and his songs have a unique charm. I'm thinking of using him for a 'hunger marketing' campaign to boost downloads and platform visibility."
"As of today, Claire has 2.7 million YouTube subscribers. If I play this right, I might even siphon some of YouTube's traffic. A pool of 10 million users? I'd be lying if I said I wasn't tempted."
Barry chuckled. "Not bad. If you ever go bankrupt, you should consider becoming a Hollywood director—or at least register as a screenwriter."
"The script was Spielberg's idea," Edgar replied casually.
Barry Robin smirked, still scanning the document with keen interest.
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