The good news: Coldplay's back in the studio working on a new album with producer Brian Eno, reportedly slated for release by the end of the year.

The bad news: The group's record label, EMI Music, may not be around to see its latest recording take flight.

It's not easy keeping a major record label afloat these days. No one knows better than Guy Hands, who controls private equity firm Terra Firma Capital Partners, EMI's owner. Despite boasting heavy hitters Coldplay and Norah Jones -- not to mention the Beatles catalog -- EMI last month reported a loss of 1.5 billion-pounds, or $2.4 billion, and continues to drown in debt. It's like watching the Titanic go down.

With Warner Music Group (NYSE: WMG) wrapping up 2009 with $339 million in cash and debt of a mere $1.94 billion, CEO Edgar Bronfman Jr. appears to have an extra lifeboat. We're just not sure whether he's Leo DiCaprio or Billy Zane.

WMG reported a 3% increase in revenue for the first quarter of 2010, to $918 million, with a net loss of $17 million, or $0.11 per share. That compares to a year-ago profit of $23 million, but that number was inflated by a one-time infusion when the company sold its stake in Front Line Management.

For EMI, the story is very different. Music industry chatter is buzzing that the label may soon put the legendary Abbey Road Studios -- home to many a Fab Four recording in the late '60s -- on the block. Everyone, including the equally legendary Sir George Martin, is chiming in, but the future of the studio looks pretty bleak to us. And EMI hopes to amputate other limbs as well.

The demise of the record label hierarchy is not new. Greed, regulatory mayhem, and technology have all but bludgeoned the old guard. And then there's the little problem of all those music lovers who simply don't see the point of a middleman -- especially a large, monolithic, angry middleman -- squatting between them and their music. None other than American Idol creator Simon Fuller (not to be confused with Simon Cowell) recently exited his own 19 Entertainment and CKX (Nasdaq: CKXE) to launch a venture that will more closely connect artists to their fans.

But even among its major-label brethren -- Vivendi-owned Universal Music Group, Sony (NYSE: SNE) Music Entertainment, and Warner -- EMI is particularly waterlogged, with its share of music industry sales teetering at 10%. Toss in a high-profile, ongoing dispute with its lender, Citigroup (NYSE: C), and you're singing a pretty bleak tune, indeed. It also doesn't help to have one of your budding acts unceremoniously dissing your tight-fisted policy against video-embedding in public, as EMI rockers OK Go are OK-going about at the moment.

So what would you do, if you were Bronfman? He's reignited the rumor mill by noting that the regulatory climate shouldn't present any obstacles to a possible takeover. Then, during Warner's first-quarter earnings call, he said that consolidation is "certainly possible." He's been dancing around this merger for a few years, but this may be his last shot. If you were Bronfman, would you stay or would you go? Let us know in the comments section below.

Fool contributor Cathy Applefeld Olson would like to see a Billie Joe Armstrong-Chris Martin collaboration, should Warner absorb EMI. She does not own stock in any of the companies mentioned in this story. The Motley Fool's disclosure policy buried Paul.