Warner Music Expands Use of Cisco's Eos

Written by Ryan Lawler

Wednesday, August 12. 2009 at 04:55 PM EDT Post a comment

Digg   Del.icio.us   Reddit   Email This

no ratings

• Login to Rate

Warner Music Inc. today announced a strategic relationship with Cisco Systems Inc. (Nasdaq: CSCO), with plans to expand its use of Cisco's Eos content management platform for its artist Websites.

For Cisco, the expansion of its relationship with WMG is a vote of confidence for Eos, which was launched earlier this year. Cisco CEO John Chambers says the entertainment industry is at a tipping point, which Cisco hopes to cash in on.

The music industry in particular is facing a transitional period that is a bit of a paradox, he says. "Music consumption is up... but revenues are down."

To help deal with that, Cisco's Eos is a hosted, software-as-a-service (SaaS) platform that is designed to help media companies create Web communities around their libraries of content. The system provides a suite of tools for site administration, content management, and reporting and analytics of social sites.

As part of the deal, WMG has committed to deploying a number of new artist Websites using the Cisco content management platform. Artists such as Paramore, Trey Songz, and Halestorm are already running Eos-powered Websites, but WMG says that it will dial up new sites for artists such as Jason Castro, Estelle, Lupe Fiasco, Straight No Chaser, and others.

The announcement is an expansion of an existing relationship between the companies. When Eos was first announced earlier this year, WMG was using Eos's integrated backend to help manage Web properties for artists like Laura Izibor and Sean Paul.

One of the reasons WMG decided to expand its use of Eos is the ease with which it can create new Websites. Michael Nash, executive vice president for digital strategy and business development at WMG, says the company can now launch artists' sites five times faster than it could have done previously.

WMG CEO Edgar Bronfman praised Cisco's scale in helping it to choose Eos. "In order for us to manage hundreds and hundreds of Websites, we needed a unified platform and a strategic partner that could help manage a complex set of issues," Bronfman said.

One final reason that WMG might have gone with Eos is the platform's business model, which involves a revenue share with content owners. That's where the strategic part of the relationship comes in.

Cisco's pitch to media companies is that it can lower the total cost of ownership (TCO) of managing multimedia assets on the Web, allowing media companies to launch new sites as a service, rather than installing, developing, and maintaining the systems themselves.

Neither company would comment specifically on the financial terms of the relationship, but Chambers said, "This is not just a one-revenue-stream model." Chambers also said that the revenue model could evolve over time.