NEW YORK (Reuters) - Network equipment maker Cisco Systems Inc Chief Executive John Chambers said on Wednesday that the company’s latest expansion in the online media and entertainment business will help improve relations between the music industry and Silicon Valley.
Cisco announced it was expanding an existing deal with the world’s third largest music company, Warner Music Group Corp, to build and manage websites for more artists including Grammy-nominated rock band Paramore and singer Trey Songz.
Media companies like music labels have had a tense relationship with Silicon Valley companies in recent years as their Web technology has enabled consumers to bypass traditional media’s established business models.
Cisco’s Eos media system is a new software service that helps build and maintain websites featuring music and video as well as social networking. Chambers said it could help music companies find more profitable business models amid a 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 told reporters over the company’s Telepresence video conferencing system.
Many in the media world have felt that technology companies have not done enough to protect the digital media copyrights of everything from songs to movies.
“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.
Because the service will use Cisco’s servers, media companies don’t need to worry about maintaining the service themselves. Warner Music was the first major entertainment company to sign up for Eos.
Cisco, better known for making routers and switches that direct Internet traffic, has expanded over the past several years into new businesses like software, servers, video conferencing, and consumer products like cable set-top boxes and video cameras. (Reporting by Ritsuko Ando and Yinka Adegoke; Editing Bernard Orr)