The Music Business: Yep, It’s Still In Trouble

wmg.pngLast month, stock analyst Rich Greenfield said that shares in Warner Music Group were worth a mere $7.50, thanks to consumers viewing music as “just above dust bunnies” in the “worth” department. The stock plummeted, and yesterday Greenfield downgraded the stock’s price again, saying specifically that reduced floorspace in big-box stores will hurt the recorded-music business even more.

Greenfield put the stock’s target price at $5 in his latest missive, and so far today, shares have gone down accordingly, complete with dead-cat bounce; the graph above was just snatched from Yahoo! Finance. Silicon Alley Reporter is hearing that once the stock gets low enough, EMI owners Terra Firma may try and snatch up the company; it seems unlikely at this point given Terra Firma’s desire to cut costs at all costs, but if a combined EMI-WMG does finally come to fruition, it’ll surely buoy the fortunes of anyone who directly makes money off of copying documents that are handed out during mass layoffs.

WMG: How Low Can It Go? Will EMI Buy? [Silicon Alley Insider]

  • coolfer

    correction: *recorded* music business is still in trouble.

  • King of Pants

    @coolfer: As opposed to that music that just plays itself on magic molecules of air, that emerges from the Platonic realm and simply nestles about you like fine gossamer?

  • Chris Molanphy

    Anything that shames Edgar Bronfman just delights me to no end. Not only is he an even bigger pro-DRM tool than The Thug; he’s now wrecked two major media companies in a row (the other being the former Vivendi Universal) and deserves to be taught a lesson the harshest, most humiliating way possible.

  • annkpowers

    @SJC: I think what he means is — music, as opposed to the concert biz, music-related merchandising, “American Idol” and other music-related TV shows, rock-music themed video games, megachurches who feature five bands every weekend….pop music continues to be a vital part of the culture and the economy, though the outmoded means of distribution is dying.

  • Ned Raggett

    Maybe to take it further (obvious truism alert) — it’s a vital part of the economy but not in and of itself. It’s been/being rolled into the entertainment economy as a whole rather than being a separate entity. Nearly all of Ann’s examples talk about music interlinked with something else — TV, gaming, religion-as-entertainment.