Music Sales '08: Could Be Worse

File under "soft bigotry of low expectations, music industry edition": In a recent note, Goldman Sachs' Ingrid Chung says Warner Music Group is...okish. Like other analysts, she notes that WMG has sold a lot of Josh Groban records recently, and she's mildly optimistic about Warner's pursuit of so-called "360" deals. Most interesting, though, is her note about music sales in the U.S. -- while they're awful, they might not be getting worse.

While U.S. CD sales are down 14.6% y/y so far in 2008, she notes, and that's actually an improvement over 2007 trends, when sales declined between 16.9% and 20.6% each quarter. Most folks we've talked to believe that the decline in U.S. album sales should actually accelerate this year, as big box retailers cut way back on the floorspace they devote to music, so if this holds up it means the industry's worst days may have passed.

We're skeptical about that, but investors seem to have bought the story: WMG is now trading at $8.21, up 80% from it's 52-week low, achieved just last month.