So Far, So Good
Recent results from Warner and EMI weren’t as bad as might have been expected, and the latest news from Universal Music Group also suggests that so far the recession hasn’t hurt the major music companies too much.
UMG’s revenues grew 3.5 percent to euro 3.14 billion ($3.96 billion) in the first nine months of 2008, although unfavourable currency exchange rates turned that into a 3.8 percent decline in real terms.
It seems that a 33 percent increase in digital sales, higher license income and the growth in publishing and merchandising that came with the 2007 acquisitions of BMG Music Publishing and Sanctuary are offsetting plummeting CD sales.
The best-performing releases included Duffy, the “Mamma Mia!” soundtrack, new releases from Lil’ Wayne and Jack Johnson and the continued sales of previous releases from Rihanna and Amy Winehouse.
Boosted by the new revenue streams, Universal’s pre-tax earnings rose 22 percent to euro 408 million, a figure that looks even better thanks to restructuring costs going up from euro 17 million to euro 41 million.
Parent company Vivendi’s overall revenues were 13.6 percent up, at euro 17.7 billion, yielding a pre-tax profit of euro 2 billion – euro 199 million of which went toward integrating recent purchases including Neuf Cegetel and Activision.