Record labels continue to flounder in the face of basic economics and 10 years of failed strategies. As part of their latest flip off to customers, Warner Music Group announced they will stop free streaming of music. While they haven’t clarified whether this means removing all current streaming deals, the idea is likely meant to remove a large portion of music from popular streaming sites like Spotify and Last.FM.

Warner Music claims there isn’t enough money being made from streaming, but once again, Warner Music is ignoring basic economics here and worse, ignoring a large market of customers who they can make money on selling true scarce goods.

First, if customers can’t find your music, then they’ll find someone else who’s willing to stream, share, and use all the marketing tools at their disposal. And for those who want Warner music, well, there are more than enough unauthorized sources that offer no direct revenue back to the labels. So Warner Music’s artists get less exposure and file-sharing still runs rampant. How is this suppose to increase revenue?

Warner Music could use streaming as a marketing tool to increase the value of scarce goods (not music files) like concert tickets, merchandise, or the many other new music business models we’ve seen.  And if they were really smart, they’d stop strangling music streaming services with onerous service charges that make it impossible to innovate and run a business.