Levy Upbeat Despite The Numbers

Universal Music chief exec Jean-Bernard Levy reckons there’s too much gloom surrounding the recorded music business and in his MIDEM keynote was upbeat about the new business models coming over the horizon.

"I think altogether today there is an exaggeration in the industry," he said in his January 26 speech in Cannes. "Of course it is not doing that well, but look at us [Universal], we have flat revenues, a good two-digit margin and it’s not as dark as what many people describe.

"Back in 2003 the numbers didn’t look very good but, as a shareholder of Universal, I have seen the numbers go up quite sharply. We had in ’03 a three percent operating margin business and we have today a 12 percent operating margin business."

Although Levy joked that Universal could benefit from EMI’s problems by gaining more staff or bands, he said that ultimately a stronger competitor would benefit the whole industry and hinted that he believes that may happen.

"We like to have strong competitors. I hope that after the shakeup [at EMI] there will be a strong set of major companies that will help the music industry to grow."

Although he sees digital entertainment as the key growth area via technological development, broadband penetration and globalization, Levy said he doesn’t necessarily see this leading to the demise of the CD.

"If we have the right creative policy and if we understand the technology well and the consumer well, then digital entertainment will continue to expand and will be very successful, " Levy said.

"It is a transition into a very diversified model, of which CDs will still play a part," he explained, pointing out that the real key to the industry’s future still remains the spotting of the right creative talent.