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The abysmal result of the Estelle experiment would seem to support the notion that high-profile iTunes holdout Kid Rock is an anomaly rather than a proof of the cannibalization theory.

I.B. BAD DOES THE MATH ON WARNER’S EXPERIMENT IN ERROR

"American Boy" Becomes a Guinea Pig as the Bunny Plays Chicken With Apple
Warner Music Group’s test of the theory that a la carte downloads cannibalize album sales via the removal of Estelle’s album Shine and Top 10 smash Pop single “American Boy” from the iTunes Store has ended after less than two weeks. The tally: weekly album sales from the last full week the LP was available at iTunes and the one full week it was unavailable actually decreased—from 5k (for the week ending 8/17) to 4.6k (for the week ending 8/31), while WMG sacrificed tens of thousands of single sales by yanking the track (it’s being sold on an album-only basis at Amazon MP3 and elsewhere).

This abysmal result would seem to support the notion that high-profile iTunes holdout Kid Rock is an anomaly rather than a proof of the theory.

Not surprisingly, Estelle’s album and single reappeared on iTunes following the weekly changeover on Tuesday (9/9), suggesting that Warner either realized the strategy had failed or backed down from a dangerous game of chicken with the #1 music retailer.

Apple had reportedly been sufficiently annoyed by the move that it threatened to retaliate by pulling all mentions of WMG product from the various splash pages of the iTunes Store on a worldwide basis, apart from Metallica. Had Warner not capitulated, the absence of iTunes visibility would have had a devastating impact on Q4 sales, while the leadership of Edgar Bronfman Jr. and Lyor Cohen would have once again been called into question, with the inevitable negative implications for WMG stock.

Meanwhile, word coming out of WMG East Coast is that Bronfman and Cohen offered Tom Whalley’s job to an unnamed high-profile executive while wining and dining him in the Hamptons this summer, unbeknownst to Whalley.

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