Cisco is moving into the content industry in 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, building and managing websites for artists on its EOS platform.
Cisco CEO John Chambers said the initiative would foster improved 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.
The EOS media system is a software service that builds and manages websites with rich content capabilities including music and video and social networking.
Cisco claims that the functionality will help music labels find profitable business models in the new digital economy which is eroding their traditional revenue streams due to the shift to online music sharing and downloading.
"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 €826 billion 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.
Yesterday, Warner Music 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.
