LONDON — British music major EMI’s share of the global music market was up 1.6% to 14.1% in the year ending March 31, boosted by increasing its share of the North American market by 1.8% to 10.8%.
EMI is now the No. 4 record company in North America, where its performance has been weakest in recent years. The company cited the success of “Beatles 1,” which has sold more than 22 million copies worldwide to date.
Ken Berry, chief exec of EMI Recorded Music, told Daily Variety that although the Fab Four compilation had “shocked the market” and “opened a few eyes in terms of opportunities,” there also had been significant growth in local repertoire sales worldwide.
Berry said that after two failed merger attempts, EMI’s present strategy is one of “organic growth,” but that picking up indie record companies in the U.S. remains an option if opportunities arise.
He ruled out any Internet deals on the scale of Vivendi Universal-MP3.com or Bertelsmann-Napster. “We have not made any major acquisitions because we believe in music being ubiquitous,” he said, a reference to the more than 40 deals EMI has in place with Web companies.
Both Berry and Martin Bandier, chief exec of EMI Publishing, expressed doubts that EMI could become the target of a hostile takeover, perhaps even one that would see EMI broken up. “This is not a situation where the sum of the parts is greater than the whole,” Bandier said.
As announced May 1, when EMI admitted defeat in its bid to merge with German music major BMG, sales were up 12% to £2.67 billion ($3.84 billion) and pre-tax profits before exceptional items were up 5.7% to $463 million.
But costs associated with last year’s failed merger attempt with AOL Time Warner — which, like the bruited link-up with BMG, was nixed by European regulatory concerns — helped push net income down 48% to $118 million.
EMI chairman Eric Nicoli said merger negotiations with BMG parent Bertelsmann produced negligible expenses due to the fact that “all of the work was done with internal resources.”
Many observers still consider EMI — No. 3 of the five international music majors — a likely candidate for a merger approach, in particular from a non-music company. The usual suspects include News Corp., Disney and Viacom.
Nicoli said, “Now that is it is clear that in the current regulatory environment a merger with another major music company cannot be pursued at acceptable cost and risk, we will proceed as an independent music-focused group.”