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Music is becoming a purely digital product. A digital- only recorded music company will be a much more profitable one after one-off restructuring costs. It will have lower revenue and higher margins. Its revenue will be very stable and grow with the overall digital music market growth
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With catalog providing the base profits, new releases need to be cut back dramatically to the point where the new business either breaks even or loses a small amount of money (justified by the long term catalog income stream of those songs). Thus, if the new release business is oriented towards building new deep catalog, it changes the entire process from trying to pick big hits to safely getting some good music out that has longevity