Warner Music Group the world's third-largest music company, posted a fall in quarterly profit, hurt by an industry-wide slump in sales as more fans choose to buy songs online rather than physical albums.
Warner's net profit fell to $5 million, or 3 cents a share in its fiscal fourth quarter, from $12 million, or 8 cents a share, a year ago.
Though Warner's revenue rose 2 percent to $869 million from $854 million a year ago, it declined 2 percent when factoring in the impact of the weaker dollar.
Sales of digital music at Warner were up 25 percent at $130 million during the quarter but this could not make up for the shortfall in CD sales.
US album sales are down 14 percent year on year, according to data from Nielsen SoundScan, as more fans choose to buy music as individual songs through online stores such as Apple's iTunes, or resort to using free file-sharing services to get music.
Warner Music stock is down nearly 70 percent since the start of the year as evidence of a faster-than-expected deterioration in music sales has become more clear to investors.
Warner is now the only major record and publishing music company still publicly traded after London-based EMI Group agreed to be taken private by leveraged buyout firm Terra Firma in May.
Like other major music companies, Warner is trying to realign its business to have a more comprehensive relationship with its artists beyond recording and publishing to include new digital services as well as a share of image rights, advertising, touring and management revenue.
"There will be some agreements that existing artists sign with others, as has been the case with Madonna, where it was in our view economically imprudent to do that deal," Bronfman said.
On Wednesday, Warner said it has formed a joint partnership with the estate of Frank Sinatra to manage all music, film and stage rights of the late iconic singer as well as administer all licenses for the Sinatra name and likeness.
Last month, Madonna, one of the world's top-selling artists, said she would leave Warner Music to sign with concert promoter Live Nation. But Warner retains the rights to all of Madonna's recordings to date and her publishing rights.