The City analysts are starting to spot the issue – record companies revenues may be under threat, with a resultant impact on share prices for such companies.
Webware picked up on a couple of those analysts recent notes on Warner Music, which were moved to a sell recommendation.
Richard Greenfield of Pali Research, penned a gloomy report about why he thinks the sector is headed for even greater losses.
“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,” Greenfield wrote.
Following the reports, Warner Music’s stock hit a 52-week low ($8.78) on Friday. The company’s shares, which were trading above $27 a year ago, closed Tuesday at $9.50.
The recorded music sector generated revenues of $14.3 billion in 2000, according to the Recording Industry Association of America, or RIAA. This year, it’s expected to report revenue of $10.3 billion. Had sales growth only kept pace with the U.S. economy, it now would be worth $17 billion