Tell-All Author Riffs on Music Industry in Crisis; Part 1

First of two parts

When Fred Goodman was looking for one music-industry figure whose story would be fodder for his next book as a metaphor for the industry at large, he saw only two clear choices: Apple CEO Steve Jobs and Warner Music CEO Edgar Bronfman Jr.

In the end, the former Rolling Stone senior editor chose Bronfman over Jobs for Fortune’s Fool: Edgar Bronfman Jr., Warner Music and an Industry in Crisis, in no small part due to the intense motivation exhibited by the heir to the multibillion dollar Seagram throne to transform his family’s liquor-derived empire into an entertainment company.

Why, when he could have spent his life playing tennis, did Bronfman persevere? And why does he continue to believe in the value of recorded music, despite having shown the poor timing to invest in the major-label system not long before Napster introduced the world to file sharing, causing the financial worth of recorded music to decline?

Goodman’s well-researched profile functions as history of the major-label system, from its origin through the boom, up to the declining returns and shrinking investment of today, while elucidating the personal motivations of Bronfman and other important figures at the storm’s vortex. He doesn’t mince words:

The sorry fact was that record executives had no personal financial incentive to be forward-thinking. In an industry where bonuses were based on chart performance and market share, incentives were tied to creating hits and not to addressing the fact that the CD business was being rendered unnecessary and needed to be reinvented. With a lethal myopia, the industry went around its day-to-day business and made sure all its windows and doors were locked, completely indifferent to the fact that its house was on fire.