The record loss in credits markets since August is dampening plans by music companies EMI and Warner Music Group Corp. (NYSE: WMG) to refinance debts and supply dividends to shareholders, while “reinvesting in core operations.” The company’s plans come at a moment when the music industry is dealing with sharp declines in CD sales and the continued problems in the face of widespread digital growth, according to the Financial Times. Unfortunately, neither company is rumored to be urgent ahead with the plans. WMG stock has fallen nearly $20 in the past year according to the same report, a trend that could certainly welcome a boost.

These rumors come at a duration when similar rumors have been announced that EMI wants to cut funding to trade groups like the Recording Industry of America, which work against piracy, and issue that the industry has been dealing with for a number of years. that plan hopes to benefit from the back catalogs of major artists and the potential future catalogs those artists will produce. The Financial Times notes

“the regular revenues generated by music publishing have become increasingly prized by investors at a duration when the future of the more glamorous recorded music commerce is uncertain.” The major reason cited for that uncertainty is the industry’s inability to create digital sales to replace lost CD sales.

In the end, the credit problems these companies face only indicate that new commerce models are needed. Luckily EMI seems to be main some kind of change in the current model, after dropping the use of anti-piracy software in media files final April. whether major retailers start to cut back on space allotted to CDs, which is another prediction the Financial Times quotes, the industry could face even more setbacks. Frankly, an expedited move toward the digital market is needed to offset a number of these problems, but that is going to take a major wake up sign and changes in the credit market may serve as a needed rough shake.

Original post by Richard Driver

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