Polygram president and CEO Alain Levy reported a 21% jump in net profit for the year ended Dec. 31, 1993.
Marking the Dutch media giant’s ninth successive year of record profits, Levy also said he was happy with film biz progress.
“Our movies for 1994 are exciting to watch in previews, whichis more than I could say two years ago,” he said, referring to three upcoming releases from Polygram Filmed Entertainment –“Four Weddings and a Funeral,””Backbeat” and “The Hudsucker Proxy.”
He also revealed that Polygram is “very close to an agreement” to launch a new Motown videogames label as a partnership between the Polygram-owned black music company and Philips, Polygram’s parent.
Levy unveiled a 21% increase in Polygram’s net profits to 614 million Dutch guilders ($ 320 million) for the last calendar year, with sales up 12% to $ 3.86 billion.
The film division’s sales grew by 23% in 1993 to $ 347 million, which amounts to 9% of Polygram’s total sales, up from an 8% share in 1992. Music still contributes 69% of Polygram’s revenues.
Polygram Filmed Entertainment is not contributing profits to the company, but Levy dismissed such considerations in the short term, explaining that the company’s goal was to build a catalog of film assets which would generate healthy profits by the end of the century.
In the current year, 15 films from Polygram subsids or affiliates will be released in North America, starting with Interscope’s “The Air Up There,” handled by Buena Vista, which has already grossed $ 20 million. Of this year’s releases, 10 will be in the $ 7 million-$ 15 million budget range, and five will cost more than $ 15 million.
The company has started to establish a worldwide distribution network for its films, including the Gramercy Pictures joint venture in the U.S., and an output deal with MGM/UA for bigger-budget movies. In Europe it has acquired distribs Pan-Europeene in France and Meteor in Benelux, and its overseas sales arm Polygram Film Intl. (formerly Manifesto) has an output deal with Rank in the U.K.
On the music side, Levy said that Polygram’s business in the United States, historically a weak spot, had turned the corner, with income more than doubling last year. “We still have a long way to go, but for the first time in three years I feel confident about the future.”
Pop music sales worldwide grew by 13%, with 30 albums selling more than 1 million units and Bryan Adams’ “So Far So Good” reaching nearly 7 million. Classical music sales held steady in 1993.
Levy explained that Polygram’s involvement in the Viva music channel in Germany, and a similar venture planned to compete with MTV in the U.S., was designed to give a wider platform for musicvideos, a vital means of marketing new artists.