Warner, Live Nation shares up as music outlook improves

Tag : industry profile

By Yinka Adegoke
NEW YORK (Reuters) - Warner Music Group (WMG.N: Quote , Profile , Research ) and Live Nation Inc (LYV.N: Quote , Profile , Research ) shares rose significantly on Wednesday as investors' views of themusic industry appeared to improve for the first time in months.
Shares of Warner Music, the world's third-largest music company,rose more than 10 percent, before easing back to trade up 5percent, after The New York Post highlighted the company as thebest-performing media stock to date in 2008.
But Warner Music's recent strong performance comes after it hit anall-time low of $4.58 in January, when investors sold off onconcerns about future growth of the music industry in light oframpant piracy and tumbling CD sales.
"On any given day it is tough to tell what Wall Street hates more-- radio, newspapers or the music business -- and these days ithates the music business least," said Bishop Cheen, an analyst atWachovia.
Cheen said it was positive for the music industry in general thatmore legal digital platforms are offering consumers access to musicwith sites such as News Corp's (NWSa.N: Quote , Profile , Research ) MySpace, Viacom's (VIAb.N: Quote , Profile , Research ) MTV.com and RealNetworks Inc's (RNWK.O: Quote , Profile , Research ) Rhapsody.
Shares of Live Nation, the world's largest concert promoter, roseas much as 9 percent on Wednesday, building on several weeks ofsteady growth.
Investors had been concerned that Live Nation was paying too muchto sign big-name artists such as Madonna and Jay-Z, but the companyrecently spent time explaining to Wall Street that suchcomprehensive deals are paid over the term of the contracts --typically 10 years -- rather than huge upfront cash payments.
"They're part of the music industry that is profitable for theartists -- touring," said David Joyce, an analyst at Miller Tabak."What's fundamentally important is they're continuing to saythey're not seeing any effects of the economic downturn on concertticket sales." Continued...