Copyright Industry Getting Slaughtered in the Stock Markets

The copyright industry, namely the RIAA and MPAA, have said for years that file-sharing has caused the industry billions of dollars and loss of hundreds of thousands of jobs.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

Now, the stock markets have shown that there are serious questions being raised about whether or not we are headed in a global recession – so how is the copyright industry holding up in face of economic uncertainty?

There are those that suggest that the downfall of the copyright industry is the direct result of file-sharing. Now, the dominant headlines all week in big media have been how massive sell-offs in the stock markets push the world-wide economy into a potential global recession. Since the copyright industry companies are on the stock exchange, let’s take a look at how well they did in times of economic uncertainty.

RIAA Members

One of the big four major record labels is Sony. According to MSN Finance, it looks like there has been a very gradual downturn with stocks going up and down in general waves in the last year except for recent times where, starting on the 29th of September, the share value fell from just above 32 points to 21.02 points – the latest drop being 10.29% of about 2.49 points.

Now, moving on to Time Warner, another company that is a major record label. According to MSN finance, prior to October 2006, the stock value hovered around 16.5 to 18 points. From there, the stock soared clear into the 20+ range only to eventually fall back down to a sliver lower than there average of just under 16 points to 15 points. The value was up and down all the way up to around the 29th of last month where the share value slipped to the 14 point range. The slip paled in comparison to the two drops, one on the 6th of this month and one today which saw the share values drop all the way down to the 9-10 point range – the latest share value is at 9.19.

Now, Universal music is another major record label. It’s a bit more difficult to find, but Wikipedia revealed that, of course, Universal is a subsidiary of Vivendi SA. So, looking up Vivendi SA revealed an equally interesting graph. Since about April 2006, the company’s share value has gradually gone up from just a little under 34 points to peak at about roughly 46 points. It gave up the gains to drop down to 40 points. It’s share value wavered around this mark all the way up July where it plummeted below 32 points. Just before, interestingly enough, the 6th of this month, the value pretty much gave way and ultimately ended up at where it is now at 23.60.

Finally, we can’t forget the last major record label, EMI. Unfortunately, it’s also apparently hard to find any graphs that point to how well EMI is handling the economic crises. We tried looking up Terra Firma to no avail. EMI.L appears to turn up the wrong result since the share value is at 260+ (much more value for a company that owns the smallest big four record labels). The best we can come up with (and one that makes the most sense) is Eaton Vance Michigan Municipal Income Trust where value hovered around 11-13 points all the way up to about, again, October the 6th where the value dropped to 7.05.

MPAA Members

Now, moving onto members of the MPAA. We will use the Big 6 movie studio’s as described in Wikipedia. We already covered Sony, Universal and Warner, so we’ll focus on the other companies who are members of the MPAA.

First up is Paramount Pictures. Of course, Paramount is part of a larger company known as Viacom (the same company that was involved in the infamous YouTube fiasco) Share values seemed to have hovered around the 40 point mark for some time all the way up to part way through May where they gradually dropped off to just below the 30 point mark around July. The stock looked relatively stable all the way up to September where shares fell to the 25 point mark. Amazingly, continuing the trend with pretty much every other copyright industry company, shares then fell right on the 6th of October where they fell all the way down to 16.50 at this point. Roughly a 50% drop in the last couple of months really.

Next up, there is 20th Century Fox which is part of News Corporation. Aswe can see, shares hovered around the 18 to 20 point mark all the way up to part way through June. July saw the end of that slide where the stock value stabilized just above the 14 point mark. Another slide happened in September where shares fell down to the 12 point mark. This company seems to be different then the other ones where the major slide happened on the 29th last month where share values dropped off all the way down to 8.46 points.

Finally, the company known to re-sell their movies with each format, Walt Disney – one of the easiest corporations to find. The stock value appears to have taken quite a rollercoaster ride all year between a value of 29 to 35 points. While it is hard to discern what is going on based on the graph, it is obvious that at the beginning of the month, shares fell from just under the 31 point mark crashing down to the share value level now of 23.04.

Overall Picture

So, there is a very obvious theme going on. When the stock markets went down the tubes, the copyright industry was far from immune. No wonder they are using statistics from the 1980’s to plead their case of piracy these days, the numbers shown here clearly point to how the economic turmoil has damaged the industry in ways file-sharing never could (if it ever damaged the industry at all that is). We’re not economists by any stretch of the imagination, but it would make sense that shares are falling because of the fact that fewer people have money to buy entertainment these days. When people are broke, it’s less likely they’ll be spending their money on the latest DVD’s rather than on important things like food.

All this seems to show, yet again, that file-sharing has little to do with how well the industry is doing. If there is an economic crises, it’s no surprise that the major entertainment industry will get hurt by it as a result. No doubt some who have been legally targeted by the industry would be happy to finally see their pocketbooks hurting at this point. Then again, with economic uncertainty, is there really that many that aren’t getting hurt at this point? Also, how much farther will the copyright industry stock values collapse?

Drew Wilson on Twitter: @icecube85 and Google+.

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