Bertelsmann Posts Q1 Loss, Napster Settlement Blamed
May 15, 2007 at 5:48 AM (PT)
BERTELSMANN AG posted a first-quarter loss after its funding of music-downloading service NAPSTER led to 114 million euros ($154 million) in copyright settlements, reports BLOOMBERG.COM.
The loss was 70 million euros, compared with a profit of 99 million euros a year earlier, the GERMAN-based company said today in an emailed statement. Revenue fell 1.9% to 4.38 billion euros as the closely held company sold its BMG MUSIC PUBLISHING unit last year.
BERTELSMANN said in APRIL it will pay $110 million to settle claims by WARNER MUSIC GROUP related to its financing of the original NAPSTER service, after a similar agreement with EMI GROUP PLC in MARCH and a $60 million payment to UNIVERSAL MUSIC GROUP in SEPTEMBER. BERTELSMANN reiterated today it aims to increase revenue and operating profit this year.
"We are pleased to have reached out-of-court settlements about NAPSTER with most plaintiffs and claimants," Finance Chief THOMAS TABE said in the statement. "Overall, we got off to a good start this year and we expect to achieve our financial targets for 2007."