In the morning of last month’s Grammy Awards, Tom Whalley, chief executive of Warner Brothers Records, seemed to have everything going his way. Warner Brothers had just finished 2007 in first place in the US market, the second time it had done so in the last three years. Its holiday album, Josh Groban’s Noël, was still topping the charts long after the Christmas lights had come down.

From a booth at the Beverly Hills Hotel’s Polo Lounge, Mr Whalley accepted greetings from other music potentates swarming into town before the industry’s showcase event. Outside the patio doors, the southern California sun was sparkling.