It’s official! The music industry is fighting a losing battle
on November 7th, 2007 at 7:52 amWeb triggers Wall Street retreat in music sector
Greg Sandoval
cnet.com
Wall Street is taking record labels to task for lackluster Web sales, spiraling CD revenue and the defections of marquee acts, such as Madonna and Radiohead.
Two analysts downgraded Warner Music Group last week, leading to a sharp drop in the company’s stock price. One of the analysts, Richard Greenfield of Pali Research penned a gloomy report about why he thinks the sector is headed for even greater losses.
Greenfield wrote: “No matter how many people the RIAA sues, no matter how many times music executives point to the growth of digital music, we believe an increasing majority of worldwide consumers simply view recorded music as free.”
Proof of this was provided last month by Radiohead fans. The British super group offered the digital version of In Rainbows, the band’s latest album, for whatever fans wanted to pay. According to research firm, comScore, which conducted a study of the ground-breaking promotion, 62 percent of those that downloaded paid nothing.
To Greenfield, what’s more disturbing is that Radiohead and a growing number of top acts perceive the Internet as an attractive alternative to record labels. Nine Inch Nails’ front man Trent Reznor has indicated he plans to distribute his music online. Madonna announced last month she was leaving Warner Music for Live Nation, a music-promotion company.
“The paradigm in the music business has shifted,” Madonna said in a statement announcing the switch. “For the first time in my career, the way that my music can reach my fans is unlimited.” (more…)
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