Cisco is moving into the content industry, forming a global alliance with Warner Music.
The vendor has announced that it is expanding an existing deal with the world's third largest music company to build and manage websites for artists on its EOS media platform.
Cisco CEO John Chambers said the initiative would boost relations between the music industry and Silicon Valley. “Instead of Silicon Valley and the entertainment industry almost working against each other, it's saying, how do we work together to capture these tipping points,” Chambers said.
EOS is a software service that supports websites with rich media content. Cisco is pitching it to individual artists and the big music labels, arguing that its functionality will help them find profitable business models online. EOS is already used by Sean Paul and R&B singer Trey Songz.
“We face a transition that is a paradox in many ways. The consumption of music is up almost in double digits in terms of demand and yet the revenue generation is down about the same,” Chambers said in a teleconference.
Valuing the entire media and entertainment industry at $1.3 trillion, Chambers thinks that the changes taking place in relation to music and technology industries working together are at a tipping point that could expand the market.
Warner Music yesterday reported a bigger Q2 loss, as revenue fell more than 9% on lower album sales.
Chambers added that he believes rival music companies and the film industry will follow suit.