Major Labels

Can the Major Labels Save Themselves?

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The value of Warner Music Group stock has fallen almost 20% this week trading at the end of Thursday at $18.12 on weak earnings forecasts and an increasingly gloomy sales picture for the entire sector.  WMG ‘s 52 week high had been $31.00.

EMI stock is suffering the same fate falling 12% earlier in the week on poor sales and lower
forecasts.

The labels had hoped that digital revenues including downloads and mobile would helpEmi_80 them stem the tide of losses. But so far digital dollars – and drastic cost cutting at all labels that may
be far from over according to our sources – have not been enough to turn these giant ships around.

Could mp3’s be a part of the answer?   Perhaps. Only some kind of  bold move can lUniversal_24eave the major labels looking anything like they do today. 

Or they could rip it apart and start all over again.  Gone are the private jets – yes they still use them – replaced by a cadre of young affordable staff passionate about music, versed in the digital world and viral marketing and ready to die for their bands. These people are out there toiling away at our great indie labels.  Come on Edgar and Jimmy. Give them a chance.  LetSonybmg_50 them be backed by a great catalog whose revenue stream even out the rough earnings spots.

Oh wait…this can never happen!   You’ve got quarterly earnings targets to hit.  Wall Street wants profits; not great music.  You guys killed the business you knew  when you sold out to public companies and lost the entrepreneurial spirit. 

But the music will survive. No amount of money can kill it.

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