Investors, "Beware" of Record Companies

NewYorkCountryLawyer writes "The Motley Fool investment Web site warns investors to beware of 'Sony, BMG, Warner Music Group, Vivendi Universal, and EMI.' In an article entitled 'We're All Thieves to the RIAA,' a Motley Fool columnist, referring to the RIAA's pronouncement in early December in Atlantic v. Howell, that the copies which Mr. Howell had ripped from his CDs to MP3s in a shared files folder on his computer were 'unauthorized,' writer Alyce Lomax said 'a good sign of a dying industry that investors might want to avoid is when it would rather litigate than innovate, signaling a potential destroyer of value.'"

Comments

Re:so, what would Fool say about our Friend

[sm62704]

These guys (disclaimer: I'm not one of them and in fact haven't owned any stock for over 20 years) always say that you should pick a stock with a dividends to price ratio if ten to one or better.

Microsoft, the last I heard, pays no dividends.

So I think MS is probably a "stock for fools". If you buy a stock with the expectation of its price rising, you're gambling, not investing. That's not to say that gambling that Mars won't explode in the next two weeks isn't a good bet; some gambles are worthwhile.

As to the record companies, DUH! You don't need an expert to tell you that a company whose sales have been falling for over five years is a turkey.

Re:The vicious last bites of a wounded animal

[altoz]

Oh, they'll be dead before that. Artists are leaving record companies in droves. They'll start producing their own music and hiring niche marketing agencies to create demand instead. Even now, the smart ones are already moving in the marketing/concert promoter direction.

Re:so, what would Fool say about our Friend

[fotbr]

I doubt he'd say much.

RIAA: track record of suing their own customers, based on "evidence" gathered via pretty shady means
MS: doesn't regularly sue their own customers (their competitors, sure, but not random joe off the street)

Failure of vista: Not the only money maker that MS has. Also not their only market.
Failure of music sales: only thing the riaa has.

Re:The vicious last bites of a wounded animal

[Billosaur]

The parallels with SCO are amazing, especially given the sizes of the companies we are talking about. That they could fail to see the future coming at them and more importantly read the trends (i.e. Napster) and react to them in a positive, money-making fashion, is an indictment of the corporate system, where over-priced CEOs sit in their glass-lined offices looking like suit-wearing fish and providing just about as much value to their company. When you start treating your customers as criminals, you have slipped over the edge and down the slippery slope toward oblivion.

Not like John Henry

[Anonymous Coward]

Bad comparison! John Henry was a champion for the dignity of human work. He illustrated the very real danger of big business treating individuals as disposable ever since the industrial revolution. John Henry as the RIAA? Ridiculous.

Re:Not like John Henry

[elrous0]

No, he was a damned fool. Stubbornly digging your heals in, refusing to change, and fighting innovation to the bitter death isn't dignified and heroic. It's pathetic and stupid. It's like the old man who's afraid of computers, and who, instead of conquering his fears and adapting to the changing world, simply refuses to use them and becomes a goddamned living relic.

If America were full of John Henry's, we'd have become a third-world backwater a long time ago.

Stock shares?

[SharpFang]

Actually, I wonder how their stock shares fare.

Many companies have been proclaimed dead or dying while their shares kept going up, and they keep going up still. Some portals were proclaimed to be dead because their percentage market share vaned comparing to Google, but they actually gain users as the net grows, and they actually grow and note profits each year.

So how's it for the record industry?

Re:The vicious last bites of a wounded animal

[PhotoGuy]

Oh, they'll be dead before that. Artists are leaving record companies in droves. They'll start producing their own music and hiring niche marketing agencies to create demand instead. Even now, the smart ones are already moving in the marketing/concert promoter direction.

While I agree with the sentiment, are artists really leaving in "droves?" Other than indie artists maybe never pursuing a label to start with, how many already-signed artists are leaving the labels? Can you list more than 10? More than 20? Even if you listed 1000, I'm sure it would be something like a tiny single digit percentage (or less) of the total artists on labels, hardly qualifying as droves.

I think it *will* happen, and hopefully at an exponentially increasing rate. But for now, they still have the stranglehold on the artists.