Tyler Cowen dopes out the proposed merger between Sony and BMG.
This is a desperation merger in a fading industry. The real "industry sector" includes file sharing, once you count that, and the accompanying zero price, the concentration issues do not look so bad. On the other hand, shareholders should not worry if they don't get regulatory approval. I would expect a mess more than any significant cost savings, as the merger does not address the underlying problems faced by either company.
I think that the term "desperation merger" is generally right. There are a lot of desperate media companies out there, of all sizes. I expect to see contraction in the number of TV stations, the number of radio stations, the number of music distributors, and so on. Internet-based media will grow, and traditional media will struggle.
