LONDON — Delays in the delivery of two key albums hit EMI Group’s revenues for the fiscal year ended in March, with pre-tax profit down more than £20 million ($36.6 million) to $259 million.
Company had acknowledged earlier this year that numbers would be squeezed by the late release of the new Coldplay and Gorillaz albums. Sales of those albums will be included in the current year’s figures.
Revenue dipped 5.1% to about $3.6 billion. EMI and its peers continue to feel the pinch of a worldwide downturn in recorded music sales.
But EMI’s music publishing biz saw revenue grow 4.9% to $732.8 million, while digital music sales more than tripled to $91 million.
The company’s cost cuts, which included staff reductions and label restructuring, delivered a higher-than-anticipated saving of $64 million during the year. That helped boost profit margins slightly.
Group profit after tax was $111 million, vs. an after-tax loss of $132.6 million last year.
EMI Group chairman Eric Nicoli referred to the music market as a “challenge” but added the company’s year had been one of achievement and “important strategic progress.”
Saying the growth in digital sales was the most significant indicator of the industry’s future, Nicoli predicted those sales will double this year. “Digital growth will far outstrip the decline (in physical product sales) during the next five years,” he said. “It has the potential to drive overall growth by 5% in the next five years.”
Marty Bandier, chairman of EMI Music Publishing, said his division made $25.6 million from cell phone ringtones last year. “The digital opportunity is a real one for us at the moment,” he added.
But sounding a cautionary note about the possible growth in digital sales, Alain Levy, chairman of EMI Recorded Music, pointed out the figures are meaningless if the music is not good enough. “We need to have artists and the repertoire,” said Levy.
Robbie Williams was EMI’s top-selling artist for the year, moving 6 million units; other big sellers were Tina Turner, Norah Jones, the Beastie Boys, Blue, Kylie Minogue, Lenny Kravitz, Chingy and Moby.