FT Business Book of the Year

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All the books listed for the Financial Times and McKinsey Business Book of the Year Award

Fortune's Fool by Fred Goodman

Fortune's Fool

In his nostalgia, Goodman fails to come up with much of a prescription for the future of an industry redefined by Napster and Apple. That, perhaps, will take another book. — Read the complete FT review


Fortune’s Fool tells the story of how the music industry has met its worst crisis, the Internet Age. When Edgar Bronfman, Jr, bought Warner Music Group from Time Warner, his track record consisted of dissembling the family business, Seagram. The resulting Universal-vivendi deal collapsed in less than two years, taking much of the Bronfman fortune with it. When he and his equity partners bought Warner, they turned a profit in just 14 months, but their problems, like those of the business as a whole, were just beginning. As soon as Edgar Jr. went to work at Seagram, he began move the company into entertainment business, financed by his sale of Seagram’s 150 million shares of Dupont. That decision ruptured the board and the Seagram family, ended the 75 year history of Seagram. When Edgar Jr bought MCA from Masushita and then merged disastrously with Vivendi, and lost 3 billion, the failure nearly ended his business career.

But in the fall-out of the Time/AOL merger, Bronfman was able to rescue the once storied Warner Record Group and reinvent its flagging Atlantic Records as the industry’s most successful Internet label. At the same time, CD retailers were disappearing, and though Warner made aggressive deals with technology companies, there was no workable mass solution. By 2007 Warner’s stock, which once traded at 30, was at $7 and falling. With access to not only Bronfman, but all the major players, Fred Goodman shows through this revelatory history and analysis that the labels’ long strategy of rewarding chart success and market share turned out to be innately destructive when it came time transform the business model. Edgar Jr , the Warner labels and the industry face a final challenge from the Internet that will either save them or make them extinct: developing a recording product or service that is superior to what is already available for free.