A “challenging macroeconomic environment” is the excuse

Some call it an “economic downturn”, The media are obsessed with using the term “credit crunch”. But music publisher Chrysalis has come up with its own description of the market conditions that are causing it trouble…

Chrysalis is a music publishing business that focuses on less well-known talent and independent distributors. It has just announced its latest financial results, which don’t look so good.

For the full year, it is now forecasting an operating loss of around £1m. Last year it made a profit of £300,000.

Like many businesses, Chrysalis is suffering from the weaker economic conditions. So when it comes to explaining how the economy is affecting the business, it needs to use a term that investment analysts and shareholders will understand. Did it use the phrase “economic downturn”, “credit crunch” or “difficult market”?

No, Chrysalis has blamed its poor results on a “challenging macroeconomic environment”. Don’t think I’ve seen that term before - certainly not by a business (maybe by an economics teacher).

By “challenging economic environment” Chrysalis mean two things:

Lower consumer spending has hampered sales of CDs.

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The advertising market downturn has also affected what is known as “synchronisation revenue”. This is the income which a publisher receives when its music is used in TV programmes, films and advertisements.