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

  • Emile Hirsch, Matt SmileyEmile Hirsch hosts

    Emile Hirsch Hosts Smiley Face Art Opening at Mondrian Hotel

    Despite the rain on Wednesday night in West Hollywood, there were plenty of smiles inside the Mondrian hotel thanks to artist Matt Smiley‘s Refresh exhibition. Not only is Smiley his real last name, but several of his paintings and other pieces in the exhibit feature smiley faces. “I’ve seen more smiley symbolism lately, and I’ve [...]

  • Randall Park, left, and Constance Wu

    Constance Wu Wants Her 'Fresh Off the Boat' Co-Star Randall Park to Host the Oscars

    While the Academy may have decided to go hostless for this year’s Oscars, that doesn’t mean the rest of Hollywood has stopped thinking about who would be a good choice for the emceeing gig. Former host Whoopi Goldberg recently suggested Ken Jeong. Jeong said, when he was a guest on “The View,” Goldberg told him [...]

  • 'Schitt's Creek' Stars Reveal Dream Guest

    'Schitt's Creek' Cast Reveals Dream Guest Stars: Oprah, Beyonce and ...

    “Schitt’s Creek” has big dreams. Dan Levy, who stars as David on the series, says his wish list of guest stars includes Oprah, Beyonce, Mariah Carey and Gwyneth Paltrow. “All for different reasons, none of whom we’ll get,” he cracked at the Critics’ Choice Awards. For those who haven’t caught on to the “Schitt’s Creek” [...]

  • Barbra Streisand and Gisele Bundchen

    Barbra Streisand and Gisele Bündchen to Be Honored at UCLA Science Gala

    Science can be very glamorous. It certainly will be during Oscar week on Feb. 21 when the UCLA Institute of the Environment & Sustainability (IoES) honors Barbra Streisand and Gisele Bündchen for environmental activism at its annual Hollywood for Science Gala. “When I moved to LA, the air was unbreathable. Rivers were catching fire in [...]

  • Don Cheadle and Andrew Rannells Black

    Don Cheadle, Andrew Rannells Talk Snorting 'Coke' on 'Black Monday'

    “Black Monday” show creators David Caspe and Jordan Cahen divulged an intriguing detail to come later in the first season of the new Showtime comedy at its world premiere, held at the Theatre at Ace Hotel on Monday night in Los Angeles. “The fourth or fifth episode opens with a sexual harassment seminar, which very well [...]

  • Alfonso Cuaron attends the 44th Annual

    Alfonso Cuarón to LAFCA: 'Thanks to Your Help We Can Break Down Walls'

    Inclusion was the big winner at the L.A. Film Critics Association Awards, which was held Saturday night at the InterContinental in Century City. “This year’s winners are the most diverse in LAFCA’s 43-year history,” announced its president, Claudia Puig, adding that 14 out of their 18 awards were won by women and people of color. [...]

More From Our Brands

Access exclusive content