Stocks Down Friday, But Doing Well Overall
Friday was rough for the U.S. stock market but was especially brutal for music-related stocks. Some declines were triple — or close to it — the declines of 2.2% for the Dow and 2.8% for the Nasdaq. Even so, many music and entertainment stocks have fared relatively well in 2012.
Not all of the declines seen Friday are the result of the companies’ performances. Economic concerns in Spain and Greece have quickly carried over to the entire Eurozone and threaten the region’s single currency. Weak U.S. jobs data released Friday contributed to the pessimism, too. All sectors of the U.S. stock exchanges were down as a result, with consumer goods and technology stocks being hit the hardest.
Pandora declined 7.3% to $9.96. The stock was at $11.79 a week earlier but had given back all the gains made from its positive fiscal first-quarter earnings release. As an Internet stock with social media ties, Pandora has probably not been helped by Facebook’s post-IPO troubles. Shares of Facebook declined another 6.4% Friday to $27.72, a slight improvement from its Thursday intraday low of $26.83 but well below the $38 offering price and post-IPO high of $45.
Live Nation declined 6.7% to $8.72, well above its 52-week low of $7.14 but its lowest close since May 9. The company’s shares have been dragged down even though the company turned in fair first quarter results on May 9 and expecting a strong summer concert season. Even so, 2012 has not been bad to Live Nation’s shares — they’re up 4.9%. The company will hold its annual shareholders meeting at the House of Blues in Hollywood on Friday, June 8.
Sirius XM is facing a possible takeover by shareholder Liberty Media but fared about as well as the market indexes Friday, dropping 2.6% to $1.84. The relatively volatile stock is up 1.1% so far this year.
Some bigger, more diverse entertainment companies were also down Friday but have had a good 2012. Madison Square Garden dropped 3.3% to $36.25, although the company’s shares are near the 52-week high of $38.90 and are up 26.6% in 2012. Viacom, owner of MTV, VH1 and CMT, was down 3.1% to $46.26 but isn’t far from its 52-week high of $52.67. It’s up 1.9% in 2012. CBS dropped 5% Friday but is up 11.8% this year. The Walt Disney Company lost 2.9% but is up 18.4% this year.
Book Authors Granted Class Action Suit Against Google’s ‘Library Project’
Since music companies tend to empathize with the struggles — copyright, business transformation — of book publishers, it’s worth noting that a federal judge has granted class-action status to authors who have sued Google over its controversial book-scanning project. Started in 2002, the Library Project scanned 12 million books from around the world — including U.S. works.
Google has argues the project is protected under fair use. The Google Books Library Project website says its aim is to “make it easier for people to find relevant books — specifically, books they wouldn’t find any other way such as those that are out of print — while carefully respecting authors’ and publishers’ copyrights.” It has library partners around the world. In the U.S. Harvard University and Cornell University are among the Library Project’s partners.
But the lawsuit will decide just how carefully Google respected those copyrights. “We’re one big step closer to justice being done for U.S. authors,” said Authors Guild president Scott Turow in a statement.
The lawsuit was settled in 2008 but last year the judge rejected the settlement, saying it “is not fair, adequate, and reasonable” and would give Google a de facto monopoly in the book search market. ( NY Times’ Media Decoder blog)
File Sharing To Increase, But Comparitively Not Much
File sharing is on the rise, says technology giant Cisco in a new report. But it’s not as bad as it sounds, content owners. Cisco predicts that global file-sharing traffic will increase from 4.6 exabytes per month in 2011 to 10 exabytes per month by 2016 (a single exabyte is one million terabytes). The good news is that’s a relatively slight increase compared to the gains made elsewhere. Cisco believes total Internet usage will increase fourfold and the total number of Internet users will rise 45% from 2011 to 2016. Countries with the highest expected growth during that span are India and Brazil. ( Cisco press release)