As if you needed further proof that the record business was descending into full-on mobocracy, shares of EMI and Warner Music Group both hit 52-week lows yesterday–just three days after the Grammy Awards made everyone feel temporarily drunk with power (or at least just very, very drunk). One immediate cause: EMI’s announcement of a second-quarter profit warning, for which the music behemoth blamed weaker-than-expected digital sales and a release roster that quite as blockbuster-filled as they would have liked. The Wall Street assessment was brutally honest:
Pali Research analyst Richard Greenfield on Wednesday lowered his WMG estimates for the second time in 10 days because of its own weak results, the EMI warning and “continued rapid declines in physical CD sales.”
Concluded Greenfield: “While WMG is clearly better managed than EMI (where it appears there is complete internal turmoil), WMG is more exposed to the declining U.S. market with 40% of WMG’s revenues coming from North America (compared to about 33% for EMI).”
Oh, he did not just throw out the old “You’re crazy, you’re ugly, and nobody loves you!” line to EMI. Damn!
Music business stuck on downbeat note [HollywoodReporter.com]