“Warner Music Group Corp., the world’s third-largest record company, posted its biggest drop in New York Stock Exchange trading after reporting a wider second- quarter loss and suspending its quarterly dividend,” Don Jeffrey reports for Bloomberg.
“Warner Music plunged as much as 29 percent to $6.39. Excluding some costs, the loss of 23 cents a share missed analysts’ average 11-cent estimate,” Jeffrey reports.
“The 13 cent-a-share dividend was eliminated to build cash and make investments in artists, the company said today in a statement. Record labels have been hurt by piracy and consumer preference for buying single songs rather than full albums. Industry sales of compact discs in the U.S. fell 17 percent this year through April 13, according to Nielsen SoundScan,” Jeffrey reports.
Full article here.
[Thanks to MacDailyNews Reader “Joe” for the heads up.]
Replace “consumer preference for buying single songs rather than full albums” with “inability to force consumers to buy bundles (albums)” and you’ll have a truer sense of the issue.
If Warner Music wants to make more money, they should release better music and deign to sell those tracks DRM-free via Apple’s market-dominating iTunes Store as EMI already did long ago.
Warner, you’re not hurting anybody but yourself by trying to prop up also-rans with DRM-free tracks while denying Apple. Your tactics fail because there is a very easy and completely cost-free way for consumers to get Warner Music DRM-free. Withholding DRM-free tracks from iTunes only helps increase the piracy of your content (the same goes for NBC and their TV shows, by the way). Consumers have the power now, not you. Figure it out and get used to it while you’re still in business.