Ouch. Bad year for the music industry. (Or just record company propoganda :-).

Check out:
Labels Singing the Blues Over Expensive Failures
by Jeff Leeds for the L.A. Times.

"I've never seen this kind of damage," said Michael Nathanson, a media analyst at Sanford C. Bernstein & Co. "You had these tent-pole releases that didn't carry their weight this year. And it's going to get worse."

The major music companies report financial results differently, but most of the labels are struggling.

EMI posted a loss of $77.6million for the first half of its fiscal year--the worst first-half results in at least five years. Bertelsmann's BMG Entertainment reportedly had a loss of more than $70 million this year.

Warner Music, once the industry leader, has been posting lower pretax earnings for three consecutive quarters, and Sony Music reported operating losses of $91 million for the last two quarters. Universal Music is the only one of the Big Five record conglomerates to post gains this year.

Record executives say the fickle marketplace is making established performers seem a liability. Much like Hollywood's movie studios, the major record companies find themselves forced to pay stratospheric sums--even at the risk of losing money on the deals--for the industry's top stars.

Swept up in a free-agency frenzy, record labels during the last decade spent hundreds of millions of dollars to sign such acts as Carey, R.E.M., Bruce Springsteen, Janet Jackson, Prince and ZZ Top.

Record labels sign blockbuster pacts with hopes that mega-stars will at least pay for themselves and provide momentum for the company to sign new talent. In a business in which some 90% of the 6,000 CDs released domestically each year are unprofitable, according to major-label executives, stars are seen as safe bets--particularly when corporate parents are pressuring music labels to hit quarterly earnings targets."