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Restructured music and film publisher and distributor Air Music and Media is contemplating moves into low-budget games and downloading.

AIM-quoted Air Music lost �1.2 million in the six months to last September after the market for its medium-priced DVD-linked films collapsed, when the DVDs themselves became significantly cheaper. Mark Frey, who moved from joint chief executive officer to chairman in a board shake-out last month, says the company is sticking to its basic business of providing middlebrow, low-ticket perennially-selling products from its extensive library of CD and DVD rights, while weighing the pros and cons of applying its strategy to low-budget games and downloading.

Air Music, whose former chairman John French is now a non-executive director, has also licensed 100 more 'upmarket' titles from Universal in a deal clinched last autumn, which Frey argues could yield gross margins of 40 per cent or more. He insists the formula is to avoid high-risk, high-reward blockbusters and concentrate on unexciting products appealing to consumers of 25 and older, up to great old age, which should generate steady long-term demand.

A name change, perhaps to 'Play24/7' or something similar, is also under contemplation. Frey would like to take advantage of expected sector concentration, but a depressed share price makes this difficult.

Friendly analysts expect current full year pre-tax profits of �4.5 million on �70 million turnover, with �6 million pre-tax on the cards for the following year. At a consolidated 79.5p, down from 307.5p in late 2003, the shares are a tight market, with management holding at least 60 per cent.

If that problem is addressed and present plans look like paying off, they could reward a brave recovery punt, despite current risks.

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Air Music & Media	AIM	�13.47m	78.50p	-1.00p
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