Even Universal Feels The Pinch

It’s on the verge of being the owner of Bertelsmann’s publishing catalogue and what’s left of the U.K.’s Sanctuary group, but the world’s biggest music company is feeling the pinch along with everyone else.

Universal Music Group’s first-half revenues have dropped 4.9 percent to around euro 2.1 billion as some difficult market conditions have been exacerbated by adverse currency movements.

There are still signs that Universal is adjusting to the new recorded music market, where the rise in digital revenues is nowhere near keeping pace with the fall in CD sales, a little better than most of its rivals.

Its digital business is up 51 percent to euro 315 million, which represents 15 percent of total revenues. The average figure for the rest of the global music industry is a little less than eleven percent.

For a company that was teetering on the brink of collapse (and with some of its board teetering on the brink of jail) less than five years ago, Vivendi – Universal’s Paris-based parent company – continues what must be one of the most remarkable turnarounds in French financial history.

From being forced to run what amounted to a fire sale in 2002, when the company was said to be close to folding under a US$20 billion mountain of debt, it’s now got cash to spare and is looking to spend it when what it perceives as the right companies become available on the market.

First half revenues amounted to euro 10.22 billion compared to euro 9.61 billion for the first half of 2006, an increase of 6.4 percent.

The Q2 figure covering the latter half of 2007 suggests annual revenues are now running at about 7.4 percent higher than last year.

Vivendi’s top earner is still France’s SFR mobile phone network with revenues of euro 4.34 billion, more than 40 percent of the media giant’s gross income.

Biggest improver was the Canal+ TV Group, where recent acquisitions have upped its French pay-TV revenues to euro 2.15 billion, 17.5 percent up on last year’s euro 1.83 billion.