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August 30, 2008 1:25:02 AM CDT

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Radiohead Move Lowers Wall Street Appraisal of Music Majors

Posted Nov 7, 07 6:03 PM CST in Technology,  Arts & Living,  Business 

(Newser) – Analysts downgraded leader Warner Music' stock to a "sell" today, predicting greater losses for the embattled music sector, News.com reports. Major labels remain unable to cope with digital undercutting of the CD format, and now fear a second front: the defection of high profile acts like Radiohead and Madonna to an online sales model that cuts out the labels entirely.

The news media has characterized Radiohead’s online sales experiment as a failure since “most” (62%) so far have paid nothing under their voluntary sales system — which ignores the fact that 38% did pay an average of $6, netting Radiohead $2.7 million. Comparable sales under a label contract likely would’ve resulted in a lot less money going to the band.

Sources CNET, CNET

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Edgar Bronfman Jr., Chairman and CEO of Warner Music Group, discusses his company and the music industry at The Paley Center for Media in New York on Monday, Sept. 17, 2007. New York-based WMG is one...   (Associated Press)
Radiohead's online distribution of "In Rainbows" is the latest blow to record companies' reputations on Wall Street.   ((c) barrio dude)
Musician Trent Reznor has also announced future projects will be released online, in a non-traditional commercial venture.   (Getty Images)
Madonna performs at the Live Earth concert at London's Wembley Stadium, in this July 7, 2007 file photo. Madonna intends to sign a $120 million recording and touring deal with live entertainment promoter...   (Associated Press)
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Madonna  • music downloads  • copyright  • Time Warner  • music label  • Radiohead


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