RSS Updates
Email Updates
Reuters: China celebrated 60 years of communist rule as a capitalist economy.
Reuters: The IMF cut global debt write-offs to $3.4 trillion.
Reuters: CIT (CIT) is close to a deal to give the company to bondholders. Read More
Posts for Ticker ‘WMG’
Media Digest 9/30/2009 Reuters, WSJ, NY Times, FT, Bloomberg
Today’s Best Market Rumors (9/29/2009) (AMD)(GOOG)(AMGN)
Updated throughout the day.
Update: Xerox (XRX) may find that IBM (IBM) or HP (HPQ) outbid it for ACS (ACS) (Barron’s)
Update: Apple (AAPL) may be working on a touchscreen remote for an upcoming TV product. (The Boy Genius Report)
Update: Sequenom (SQNM) is recovering some losses, perhaps due to rumors it may be sold (TheStreet)
Warner Music (WMG) may be near a licensing deal with Google’s (GOOG) YouTube. (WSJ)
Hedge fund manager John Paulson may try to merge CIT (CIT) with IndyMac Federal Bank (NYPost)
Cytokinetics (CYTK) continues to rise despite denying rumorsthat it may be bought by Amgen (AMGN) (DJ Newswires).
AMD (AMD) could be at riskfor bankruptcy. (MarketWatch)
Alexion Pharmaceuticals (ALXN) and Vertex Pharmaceuticals (VRTX) may be acquisition targets. (The Deal)
Douglas A. McIntyre
Media Digest 2/6/2009 Reuters, WSJ, NYTimes, FT, Bloomberg
According to Reuters, Democrats say that the Senate will pass the stimulus bill today.
Reuters reports that Moody’s cut Toyota’s (TM) rating for the first time in 10 years.
Reuters writes that estimates are that the US lost 525,000 jobs in January.
Reuters reports that investments in AIG (AIG) and Citigroup (C) bought the government the least value for its money among financial firms it has given money.
Will Warner Music Go Hard After Death Row? (WMG)
Being a record label, or now a music label, is not what it once was. Not even close. Just ask Death Row Records and former owner Suge Knight. In an odd twist of fate, Warner Music Group Corp. (NYSE: WMG) may be bidding for assets of Death Row, which is bankruptcy proceedings.
The Music Business Is Doomed, Even If Digital Sales Keep Improving (AAPL)(WMG)
Over the last few years, the reporting of revenue from commercial music sales has been a "good news, bad news" deal. Digital downloads of albums and songs keep rising. CD sales keep falling.
Since sales of CDs are more profitable than the digital business, the sum of these parts undermines the music industry’s ability to stay financially viable
Media Digest 12/22/2008 Reuters, WSJ, NYTimes, FT, Bloomberg
According to Reuters, Japan’s recession deepened as its exports fell sharply.
Reuters reports that Ireland will spend $7.7 billion to bailout its largest banks.
Reuters reports that Toyota (TM) will report its first operating loss.
Reuters writes that gasoline prices hit their lowest level since February 2004.
Media Digest 11/27/2008 Reuters, WSJ, NYTimes, FT, Bloomberg
According to Reuters, markets in Asia and Europe ross about 2%
Reuters reports that the downturn in the Chinese economy deepened.
Reuters reports that BHP Billiton (BHP) was gloomy about its prospects and defended it bid for Rio Tinto (RTP)
Apple (AAPL) iTunes And The Sherman Antitrust Act
"Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal".–The Sherman Antitrust Act, 1890.
Apple’s iTunes is sort of the digital Standard Oil of the 21st Century. Its share of the music download business is breathtaking. The Wall Street Journal writes, "The store sells 90% or more of digital downloads in the U.S., according to people in the music industry."
Nokia (NOK) Takes On Apple (AAPL)
If any company has the chance to take on the Apple (AAPL) iTunes/iPod franchise it is Nokia (NOK). It has started its own music store and recently signed up Warner Music (WMG).
According to the FT, "Warner’s participation means Nokia, the world’s largest mobile phone maker, has enlisted three of the four largest record groups,"
Nokia controls 40% of the global market in handsets, selling over 400 million units per annum. That gives it a significant amount of leverage in terms of what software and services run on its phones. The company has decided that as the price of handsets drops, being in the business of providing wireless customers with products like music downloads is a way to keep its profits up.
Apple iTunes already has 75% or more of the digital music distribution business. With that high ground, it may never be dislodged. Nokia could move into a strong second place. But, for a company its size, having 10% of the market does not do it much good.
Nokia is better off trying to build its own iPhone. At least Apple does not have a huge advantage in the handset business. Yet.
Douglas A. McIntyre
Media Digest 7/1/2008 Reuters, WSJ, NYTimes, FT, Bloomberg
According to Reuters, global companies may start to issue profit warnings as business slows overseas.
Reuters reports that InBev is sticking to it offer to buy Anheuser-Bush (BUD).
Reuters reports that Chrysler is shutting minivan plants.
Reuters writes that financial executives are still looking for companies that they can buy cheap and improve.
Reuters reports that Lehman (LEH) rose after Morgan Stanley gave the brokerage a positive rating.
Reuters reports that Florida has sued Countrywide over its mortgage practices.
Reuters reports that Ford (F) was in talks to sell Volvo to Renault.
The Wall Street Journal writes that federal authorities want the names of UBS (UBS) clients who may have used the bank to dodge taxes.
The Wall Street Journal writes that Sirius (SIRI) put out financial forecasts for the firm once it combines with XM Radio (XMSR).
The Wall Street Journal writes that the US corn crop is mostly intact even after Midwest flooding.
The Wall Street Journal reports that UBS is likely to issue another profit warning.
The Wall Street Journal writes that Starbucks (SBUX) new coffee has attracted new customers and some critics.
The Wall Street Journal reports that Ford (F) is trying to maintain the vitality of its flagship product, the F-Series pick-up.
The Wall Street Journal reports that Teva (TEVA) has begun to ship a generic version of schizophrenia treatment Risperdal.
The New York Times reports that the Saudi Khurais oil field, one of the largest in the world, may not do as well as many had hoped.
The New York Times writes that business activity in the Midwest remained weak in June.
The FT reports that Warner Music (WMG) has signed up for Nokia’s (NOK) music service.
Bloomberg reports that Eli Broad says the current recession is the worst since WWII and believes the housing market will not recover for years.
Bloomberg writes that Bank of America (BAC) will pay about one-third less for Countrywide (CFC) than it had planned.
Douglas A. McIntyre
The Justice Department Gives Apple (AAPL) A Hand
Perhaps Steve Jobs has a relative as The Justice Department. The four largest music labels including Warner Music (WMG), Universal, and BMG want to band together and start a music download operation called Total Music.
Since Apple (AAPL) ITunes has a lock on the digital music industry, sets prices, and gives music publisher crumbs from the table, setting up a competing service would seem to make sense. WMG shares are only down 65% in the last two years. In most industries that would be a sign of extreme distress.
But, the US government may think the new venture is an antitrust problem. The Wall Street Journal writes that "Universal and Sony BMG Music Entertainment, the No. 1 and No. 2 music companies world-wide by market share, have gotten letters of inquiry from the Justice Department."
The law is the law and that may not change, but a situation where an industry cannot unite to save its own hide reflects a perverse sort of justice. The music publishers can’t do much to Apple. It already holds the higher ground.
Douglas A. McIntyre
Apple (AAPL) The Record Company, With Jay-Z As Chief
More than one media source claims that Apple (AAPL) will team up with Jay-Z, former president of Def Jam Records, to start its own record label. It seems the "Beatles" once recorded on Apple Records. No?
Based on information from "The Boy Genius Report" and "Ars Technica" the new label will be announced as early as Macworld Expo.
The move would be double-edged for Apple. Right now its iTunes store represents a total of 70% of music downloads.The industry figure hit 844 million in 2007 That means iTune revenues dwarf the sales of most music store chains.
Music artists are fully aware that CD unit volume is falling. Nielsen SoundScan puts last year’s drop at 15%. The contrast between download and CD revenue is a powerful incentive for performers to cut deals with a record company with a direct affiliation with Apple.
An Apple record label would alienate music publishing companies like Warner Music (WMG). But, its shares are down about 75% over the last year and the firm’s market cap is only $790 million. Apple’s is $171 billion.
The balance of power in music distribution belongs to Apple now. Jay-Z knows that, and so does every major recording artist in the world.
Douglas A. McIntyre
Media Digest 11/29/2007 Reuters, WSJ, NYTimes, FT, Barron’s
According to Reuters, a fire closed most of the oil pipeline between the US and Canada.
Reuters writes that the head of VW said the the Russian car market would eventually be the largest in Europe.
Reuters reports that credit market problems have halted plans by EMI and Warner Music (WMG) to raise new funds.
Reuters writes that shares of Freddie Mac (FRE) surged on strong demand for a record preferred stock issue.
The Wall Street Journal writes that a new FCC plan will help the buy-out of The Tribune Company (TRB) byt a group lead by Sam Zell.
The Wall Street Journal writes that Bank of American (BAC) may have to make a second investment in Countrywide (CFC) to protect its first.
The New York Times writes that credit flowing to American companies is drying up at a pace not seen in decades.
The New York Times writes that a new proposal from the FCC would prevent Comcast (CMCSA) from growing larger.
The New York Times writes that Southwest Air (LUV) set up oil hedges years ago that could make it financial better off than any other US airline.
The New York Times writes that the head of Qualcomm (QCOM) says he welcomes that Apple (AAPL) iPhone because it stimulates sales of smartphones.
The FT writes that the four large US TV networks will bring in about $120 million this year from streaming programming over the internet.
Barron’s writes that AT&T (T) has indicated that a 3G version of the Apple iPhone will be available next year.
Bloomberg writes that oil moved up $4 on news of a break in the US/Canada pipeline.
Bloomberg writes that a settlement on a Ford (F) Explorer liability case will give about one million people $500 coupons.
According to TechCrunch Google (GOOG) is experiments with a Digg-style program that will allow users to vote on search results.
Douglas A. McIntyre
Media Digest 11/2/2007 Reuters, WSJ, NYTimes, FT, Barron’s
According to Reuters, Toyota (TM) and GM (GM) gained sales in October despite a weak US car market.
Reuters writes that News Corp’s (NWS) MySpace joined the new Google (GOOG) association of social networks.
Reuters reports that Chyrsler’s lay-off could complicate UAW negotiations with Ford (F)
Reuters writes that CBS (CBS) posted stronger than expected earnings.
The Wall Street Journal writes that Merrill Lynch (MER) set up deals with hedge funds to delay its recent losses, a practice that the SEC may investigate.
The Wall Street Journal writes that Sprint (S) is examining ways to deal with its WiMax unit including spinning it off or merging it with Clearwire (CLWR).
The Wall Street Journal writes that Warner Music (WMG) will withhold allowing its songs to be used on Nokia’s (NOK) new mobile download service.
The Wall Street Journal writes that Starbucks (SBUX) is considering buying Godiva.
The Wall Street Journal writes that profits surged at PC maker Lenovo.
The New York Times writes that China has barred exports by 750 toy makers.
The New York Times writes that sales at Ford (F) dropped for the thirteen month in a row.
The FT writes that the new CEO of Siemens (SI) is ready to slash jobs to improve margins to the level of GE’s (GE).
Barron’s writes that Electronic Arts (ERTS) had strong quarterly earnings.
CNN Money writes that Don Imus will join Citadel Broadcasting’s (NYSE:CDL) radio network next month.
Douglas A. McIntyre
Media Digest 10/11/2007 Reuters,WSJ, NYTimes, FT, Barron’s
According to Reuters, several retailers cut holiday forecasts and the economy slows.
Reuters writes that Chrysler has reached an accord with the UAW.
Reuters reports that Boeing (BA) has delayed delivery of its Dreamliner 787.
Reuters reports that Sony Ericsson topped its forecasts but average handset prices were down.
The Wall Street Journal writes that Madonna is close to leaving Warner Music (WMG) for a $120 million deal with Live Nation.
The Wall Street Journal writes that cable companies are trying to catch up with satellite TV providers on the number of HDTV channels that they can offer.
The Wall Street Journal reports that the FDA approved a drug-coated stent from Medtronic (MDT)
The New York Times writes the SEC. has been asked to investigate stock sales by Angelo R. Mozilo, Countrywide’s (CFC) chief executive
The FT writes that Morgan Stanley (MS) and Goldman Sachs (GS) have had to write down more debt due to problems in the mortgage market.
The FT writes that GE (GE) will decide the fate of NBC after the Olympics.
Barron’s writes that Merrill Lynch upgraded its price target on Google (GOOG) to $740.
CNN Money writes that Mattel (MAT) directors have been sued for insider trading.
Douglas A. McIntyre
Someone Loses Big: Live Nation (LYV) Takes Madonna From Warner (WMG)
It appears that pop star Madonna is leaving Warner Music Group (WMG) for concert promoter Live Nation (LYV). The price tag is $120 million for 10 years. Live Nation will pay part in cash and part in stock, according to The Wall Street Journal. Under the arrangement, Live Nation will have" rights to sell three studio albums, promote concert tours, sell merchandise and license her name."
Some industry experts believe that each album would have to sell 15 million copies for LYV to get its money back. Lining up sponsors for events and tours could offset some of that.
WMG put on a brave face, but no one should be fooled. One large shareholder of Warner said he was fine with losing Madonna because the cost of keeping her may have been too high.
But, Warner should have gone the extra mile. There are only so many battles that the music company can afford to lose now. Its stock has fallen from $30 last June to under $10 late last month. The shares now change hands for $11.29.
The consumer move from CDs to music downloads is slowly killing Warner. It does not keep as much of a digital dollar as it does from a CD. And, each quarter a larger number of its customers move to platforms like the Apple (AAPL) iPod. Piracy has also eroded earnings.
Having a few big artists with enough star power to let Warner bring in money for sponsorships and merchandise will be critical to the company’s future. It can’t afford to let Madonna go no matter what it costs to keep her.
Douglas A. McIntyre
Companies That Management Can’t Fix: Warner Music
Now that results for the first half of the year are out, 24/7 Wall St. is revisiting its features on companies that management cannot fix. These firms have lost the ability to be turned around no matter who runs them. They become candidates for sale or liquidation, but the odds that they can do much with their current share prices is very low.
Warner Music Group (WMG) shares have fallen from a 52-week high of $27.24 to $10.92. As a large music publisher, its business model has been ruined by the digital download business.
The Wall Street Journal describes the secular decline of the WMG’s industry: "Piracy of songs over the Internet and the shift in buyers’ preferences from physical sales to new forms of digital music are a continued challenge for the music industry. Though Nielsen SoundScan data show first-half digital tracks sales surged 48.5% from a year ago, compared with a 19.3% drop in CD sales, the overall slide in sales of CDs has far eclipsed the growth in sales of digital downloads, which were supposed to have been the industry’s salvation."
According to The Associated Press, the trend away from the CD is accelerating: "A total of 229.8 million albums were sold in the U.S. between Jan. 1 and July 1, according to Nielsen SoundScan figures released Wednesday. That’s a 15 percent decrease over the same period last year. Meanwhile digital tracks sales increased 49 percent to 417.3 million this year."
WMG now operates in a world controlled by Apple (AAPL) iTunes and piracy. Apple has little incentive to offer digital downloads at high prices. It is in the business of making profits on iPhones and IPods. Pricing is an issue for content owners. NBC recently pulled out of iTunes over pricing issues, but WMG does not have a deep-pocket parent like NBC does in GE (GE).
It is sunset at Warner Music and the question now is what management will do to the company. It can only cut costs so much.
Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
Pre-Market Analyst calls (August 8, 2007)
ACLS raised to Equal Weitght at Lehman.
AEG cut to Peer Perform at Bear Stearns.
ALXN cut to Neutral at Credit Suisse.
CSC raised to Hold at Jefferies.
CSCO raised to Outperform at Bear Stearns.
DKS cut to Hold at Citigroup.
ENN raised to Outperform at Baird.
GNEt started as Buy at Oppenheimer.
GNW raised to Buy at UBS.
HLYS downgraded at JPMorgan, Wachovia, Baird, CIBC.
HS started as Neutral at B of A.
IPGP raised to Overweight at Lehman.
LEAP cut to Mkt Perform at Wachovia.
OVTI raised to Overweight at JPMorgan.
PCLN raised to Positive at Susquehanna.
PCS cut to Mkt Perform at Wachovia.
PSPT raised to Outperform at Piper Jaffray.
RDN cut to Hold at Citigroup.
TRLG raised to Outperform at FBR.
WMG raised to Buy at Citigroup.
Jon C. Ogg
August 8, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
Warner Music (WMG) Results Actually Okay: Digital Up 29%
Edgar Bronfman, Tom Lee, Bain Capital and every other Warner Music shareholder will likely want to send a thank you note to EMI Music Group today, for making it look like a winner. Warner’s Q3 wasn’t stellar — revenues down 2% (5% in constant currency), while earnings dropped from $0.12 to $0.10…continued here
Media Digest 7/18/2007 Reuters, WSJ, NYTimes, FT, Barron’s
According to Reuters, the board of Dow Jones (DJ) has approved a $5 billion offer from News Corp (NWS).
Reuters writes that British Imperial Tobacco has agreed to buy rival firm Altadis for $22 billion including debt.
Reuters also reports that strong earnings at Intel (INTC) were hurt by a drop in margins.
Reuters reports that Yahoo! (YHOO) reported lower earnings and gave a weak forecast.
Reuters also reports that RIMM (RIMM) will launch a Blackberry that works on cellular and WiFi.
Reuters also writes that Warner Music (WMG) has overtaken rival EMI in market share.
The Wall Street Journal writes that two Bear Stearn (BSC) hedge funds have no value due to the damage in the sub-prime lending sector.
The Wall Street Journal writes that Starbucks (SBUX) has named a COO.
The New York Times writes that Warner Music WMG) will not bid for EMI
The FT writes that Chrysler’s buy-out faces a rise in costs.
Barron’s writes that 3Com (COMS) has been approached by private equity firms.
Douglas A. McIntyre
-
Today’s top tickerspy Indexes Home Furnishing R... +14.1% Ethanol and Biofu... +5.1% Electronics Retai... +2.1% Diabetes Stocks +2.0% Memory Chip Stock... +2.0% 
-
-
- Korea National Pension Fund: Not Reviewing Sydney Building Buy
- Drillsearch Says Santos JV Well Encounters Significant Pay
- UK Brown: To Aid Econ Till Private Sector Upturn In Place
- UK Recession Is Catalyst For Decade Of Business Change -CBI
- Australian Min: Won't Be Drawn On Potential Site Of 2nd Sydney Airport
- China Longyuan Power Seeking Up To US$2.5 Billion In Hong Kong IPO - Source
-
-
- paidContent - Nielsen Biz Selling Print, Online But Not Until December; Lachlan Murdoch Considering Investing
- paidContent - Jason Goldberg Leaving Xing After A Year; New Startup & Investments
- paidContent - ESPN.com's Bill Simmons Gets A Twitter Time Out, Sort Of
- paidContent - Finally, MySpace Music Licenses 'Fifth Label' Merlin; Reins in Fiercest Critic
- paidContent - Why Sony's Planned Music Store Won't Start Out As A Serious iTunes Challenger
- paidContent - paidContent Quick Hits 11.20.09
-
©2009 24/7 Wall St.
Powered by WordPress.com VIP
Designed by SlipFire
