Remember the halcyon days of last week, when Goldman analyst Ingrid Chung suggested that music sales may not be quite as awful as everyone thought? Pali Research’s Rich Greenfield is here to disabuse you of that fantasy.
Rich, in a note (reg. required) that once again urges investors to sell (or short) Warner Music Group, lays out his case concisely:
While some investors were excited by an improvement in CD sales (smaller declines) in the first two weeks of 2008, unit sales have rapidly dropped off, with year-over-year declines now back over 20% on a weekly basis. As floor space at retail continues to contract and consumers begin to forget what a CD is, we expect physical CD unit sales declines to accelerate. In addition, digital unit sales are up only 30% so far this quarter, about half of the growth experienced last year at this point in the quarter.
See Also: Music Sales ’08 Could Be Worse
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