Report: UMG Diversifying To Grow
September 5, 2008 at 5:39 AM (PT)
UNIVERSAL MUSIC GROUP earnings dropped 9.2% during the recent quarter, according to disclosures by parent conglomerate VIVENDI, reports DIGITALMUSICNEWS.COM. They write that UMG has shown losses for the past three of four quarters, a situation that is now stirring some rumors of a possible shakeup ahead.
The quick analysis is that UNIVERSAL, like other majors, is suffering from continued a seemingly-bottomless drop in recordings. That is happening despite aggressive digital asset increases, a transition that is failing to cover for the broader physical declines.
But UMG is also diversifying, and measured by the previous two quarters, earnings actually increased 17.7% to 259 million euros ($378 million). That increase moves to nearly 25% when measured at currencies, thanks partly to the additions of BMG PUBLISHING and SANCTUARY.
The data, supplied by parent company VIVENDI, shows a pronounced drop in 2003. In that year, revenues slipped 20.7% to 4.97 billion euros. "For the full year 2003, UMG's revenues of 4.974 billion euros were 21% below last year due to weakness in the global music market, adverse currency movements and a lower number of releases from global superstars," VIVENDI revealed in its annual statement.
DIGITALMUSICNEWS.COM asks, "Can UNIVERSAL MUSIC reclaim its past financial glory?" Against extremely challenging market conditions, the market leader is now constructing a more diversified and digital company, one less reliant on the once-stable CD.