Music Industry Positioned to Navigate Digital Transition

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According to Fitch Ratings, the music industry should be able to continue to navigate the digital transition within existing credit profiles. Digital content delivery has disrupted both advertising and entertainment companies over the past several years. For the music industry, the transition from physical to digital (including the affects of piracy), continues to be a challenge. However, given the competitive dynamics and cost structures for industry participants, Fitch does not expect material credit issues to arise during the industry’s continued evolution toward legal internet distribution or from high profile musicians leaving major labels. Below is an excerpt from Fitch’s 14-page credit analysis report on ‘Warner Music Group’ (rated ‘BB-’ with a Stable Rating Outlook). The report discusses key components of Fitch’s ratings and outlook and includes a discussion on the future of the music industry…..