From hitsdailydouble:

HOW LOW CAN YOU GO? The stock market has been going gangbusters of late, with one notable exception. Warner Music Group hit a new low Monday, dipping below $15 for the first time to close at $14.88, a drop of 76 cents (or 4.75%) on the day. Shares had been languishing in the $16 neighborhood for several weeks before steadily losing ground in recent sessions. Wonderers wondering whether a free fall, a la ArtistDirect, is in store. (7/11p)

I am as distraught over the changes/havoc wreaked at the Warner Music Group as anybody.  But to compare their stock with that of ArtistDirect evidences a complete lack of knowledge of both enterprises or a vindictive desire to punish a company that is not playing ball on the terms that "Hits" has defined.

ArtistDirect was a new model, with merchandising contracts as its only true asset.  Merchandising contracts that were going to expire.  Oh, there was also infrastructure, but not only were the Websites of failed dot coms not worth much, their desks and Aeron chairs were sold for bupkes.

Warner Music is a great company with almost half a century’s worth of recorded assets, along with a vast music publishing library.  There is no way in hell that the stock of Warner Music is going to go down to zero.  To posit this is to believe that if the real estate bubble bursts, everybody’s house and land will be worth NOTHING!

But they’re not making any more land.  And you can live in a house.

And they’re not making any more Led Zeppelin.  Or even Lowell George records.  Yes, despite the merger of MCA and PolyGram, Warner STILL has the best music catalog.  Which will sell forever.  If the company were to stop making new product tomorrow, and just employ licensing executives and accountants, the dough would STILL roll in.

Hell, that’s why DreamWorks went out of business.  They HAD no catalog.  That’s what gives the major labels a leg up.  They’re making money in their sleep, with no effort other than pressing and distribution.  And when these entities finally wake up to the fact that the Internet is not a vast piracy playground but rather a marketplace heretofore unknown, those assets are going to be worth MORE!

Yes, imagine if EVERYBODY owned "Stairway To Heaven".  Oh, you wouldn’t be able to charge them a buck, but make the price low enough and everybody will buy it.  And how many copies of "Suite: Judy Blue Eyes" will be downloaded?

That’s the Internet paradigm.  Flat fee pricing for everybody.  Just like cable TV.  Rather than try to replicate the CD model online, the labels just have to loosen up and embrace new theories of distribution.  Hell, they could have been reaping money from the original Napster for half a decade instead of not only forgoing this income, but expending money suing their customers, creating ill will in the process.

Mismanagement?  Over-leveraging?

Absolutely.

Valueless?

Not by a long shot.

As for the demand for back issues of "Hits"?

God, I’d rather own Tiffany’s remake of "I Think We’re Alone Now".  At least there’s a desire for that.