You will be redirected back to your article in seconds

Music sales stats side with slumping distrib

UMG sees losses while BMG, EMI profit

In the music business, bigger isn’t necessarily better — that was the implication of new global market-share data released by the U.K. publication Music & Copyright on Tuesday.

Industry behemoth Universal Music Group boosted its market share by more than a percentage point to just under a quarter of the entire market in 2002. However, the company’s revenues fell by 4% to $6.8 billion worldwide, and profits sank 23% to $601 million.

During the same period, EMI’s share tumbled to 12% from 13% and the company barely beat out Warner Music (11.9%) for third place. But the British label group still managed to boost the bottom line by a healthy 33% to $413 million, making it the most profitable of the five majors.

Bertelsmann-owned BMG was the only major to substantially buck that trend, boosting its share to almost 10% from 8.2% in 2001, and swinging from a substantial loss in 2001 to a profit of $135 million last year, thanks to strong releases from Avril Lavigne, Pink and Elvis Presley, among others.

Universal has been criticized in industry circles for failing to keep its costs in check, spending huge sums on the acquisition and marketing of talent in order to maintain its dominant share position. That problem is becoming more acute as parent Vivendi Universal shops the unit around for a sale.

The company has begun to reverse that pattern — most recently cutting staff at underperforming MCA and consolidating operations under the Geffen moniker.

EMI, by contrast, embarked on one of the most aggressive cost-cutting campaigns in music-biz history last year, axing nearly 2,000 staff, trimming 25% of its artist roster and migrating its Virgin Records imprint to the East Coast.

The strategy paid off in the form of much-improved profits, but industry watchers are wondering how long the label can benefit from lower costs before it has to start boosting the topline as well. To that end, EMI and several other majors are considering various forms of business combinations to gain scale in a difficult market.

With that in mind, Music & Copyright calculated the global market shares that would result from several potential combinations among the majors. A merger between EMI and Warner Music — among the most likely possibilities — would create an entity with just under 24% share, while a Warner-BMG union (including BMG unit Zomba Music) would have a share of 23.2% worldwide.

The Music & Copyright survey covered 38 national markets — including the world’s 20 biggest markets — comprising 98% of all the recorded music sold worldwide.

More Scene

  • Mark Hamill'Star Wars: The Last Jedi'

    'Star Wars: The Last Jedi' Honors Late Carrie Fisher at Elaborate Premiere

    In the music business, bigger isn’t necessarily better — that was the implication of new global market-share data released by the U.K. publication Music & Copyright on Tuesday. Industry behemoth Universal Music Group boosted its market share by more than a percentage point to just under a quarter of the entire market in 2002. However, […]

  • Ajit Pai Free Speech

    FCC Chair Plays for Laughs at D.C. Event Amid Fierce Net Neutrality Debate

    In the music business, bigger isn’t necessarily better — that was the implication of new global market-share data released by the U.K. publication Music & Copyright on Tuesday. Industry behemoth Universal Music Group boosted its market share by more than a percentage point to just under a quarter of the entire market in 2002. However, […]

  • Variety Press Play Home Entertainment and

    Variety’s Home Entertainment & Digital Hall of Fame Inducts Five Industry Leaders

    In the music business, bigger isn’t necessarily better — that was the implication of new global market-share data released by the U.K. publication Music & Copyright on Tuesday. Industry behemoth Universal Music Group boosted its market share by more than a percentage point to just under a quarter of the entire market in 2002. However, […]

  • TrevorLIVE

    Kristin Chenoweth Doesn't Know If She'll Be in Season 2 of 'American Gods'

    In the music business, bigger isn’t necessarily better — that was the implication of new global market-share data released by the U.K. publication Music & Copyright on Tuesday. Industry behemoth Universal Music Group boosted its market share by more than a percentage point to just under a quarter of the entire market in 2002. However, […]

More From Our Brands

Access exclusive content