Polygram bottom line rides on hits; pix dip
LONDON — “Pop” and “MmmBop” gave a lift to Polygram’s financial results in the first half of 1997, but a lack of hit movies put a dent in the company’s otherwise buoyant figures.
Overall, Polygram reported a healthy 5% rise in sales to $2.33 billion, and a 4.1% increase in profits after tax to $156 million for the six months to June 30.
U2’s long-awaited album “Pop” and Hanson’s surprise hit “Middle of Nowhere,” featuring the breakthrough sin-gle “MmmBop,” were the main contributors to a 9% rise in music sales and a 14% increase in music profits, a strong performance in the context of a difficult global market.
But Polygram Filmed Entertainment reported a loss of $47 million from sales of just $303 million, down 14% compared to the first six months of 1996. That was partly due to the poor performance of films such as “The Por-trait of a Lady” and “Gridlock’d,” and partly because PFE’s release slate is heavily skewed to the second half of the year to coincide with the launch of its U.S. distribution company.
Upcoming pics include David Fincher’s “The Game,” starring Michael Douglas; the latest Coen brothers pic “The Big Lebowski”; and the Rowan Atkinson comedy “Bean,” which has already posted strong box office figures in Australia.
Music accounted for 87% of all Polygram’s revenues in the half year, with film contributing the remaining 13%. Pop sales in the first half of the year increased by 10% to $1.54 billion, two-thirds of the company’s revenues.
Nine albums sold over 1 million units, with U2’s “Pop” topping 5 million sales and the Hanson album reaching 3 million. The two discs by blind tenor Andrea Bocelli together sold 4.2 million units.
“We are therefore encouraged by the performance of music for the year to date,” Polygram president Alain Levy commented. “Despite challenging conditions in some of our markets, Polygram’s expertise in breaking new acts and promoting established artists is reflected in the first-half results.”
In regional terms, North America was Polygram’s strongest market, with sales increasing 11% thanks to an in-crease in music sales and the strength of the dollar. European sales increased by 5%, with music sales particularly strong in Germany, Italy and Switzerland.
But Asia posted a 7% decline, largely reflecting problems in Japan where the company is cutting back on its dis-tribution of product through third parties. Sales in other Asian territories grew strongly, and the emerging markets of Argentina, Brazil and Mexico contributed to a 19% growth in the rest of the world.