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| ANALYST LOG |
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| AUG 4, 2003 - UMG'S MUSIC REVENUES DOWN 15% IN THE FIRST HALF OF 2003 -- GLOBAL MUSIC SALES LIKELY DOWN BY MORE |
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The financial results of French entertainment conglomerate Vivendi Universal (VU) show that global music sales continue to decline sharply. Revenues for Universal Music Group (UMG), the world's largest record label and a VU subsidiary, were 15% lower in the first half of the year than the same period of 2002. |
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| But amazingly this sharp fall, which excludes the impact of currency movements, may underestimate the fall in global music sales. This is because, in Q1 at least, UMG did better than its competitors, with the firm raising its global market share to 22% versus 21% a year earlier. If UMG managed to maintain this larger slice of the market through the first half of 2003, then the rest of global music industry must be doing even worse than UMG. |
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While external factors such as piracy are blamed for falling sales, it is also fair to say that early 2003 saw relatively few high-quality album releases. 50 Cent's "Get Rich Quick Or Die Tryin'" (a UMG release) was one of the few albums launched in early 2003 to receive rave reviews. Other eagerly awaited releases, such as Madonna's "American Life" and Linkin Park's "Meteora," were considered disappointing. |
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| In a recent report, Redshift Research used the ratings given by independent music critics to measure the quality of new music. Based on this analysis, the top 10 selling albums in the US in the first half of 2003 received an average quality rating of only 3.3 out of five, 11% lower than the average rating of 3.8 awarded to 2002's ten hottest CDs. Given this sharp drop in standards, it is not surprising that sales have been hit hard. |
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| But all is not lost. The second half of the year typically accounts for 60% of annual music sales, making the next six months a crucial time for the global music industry. UMG, along with other labels, will increase the pace of big album releases as Christmas approaches, and has an impressive list of forthcoming titles from artists such as U2, Ja Rule, 2Pac, Mary J. Blige and Ashanti. But, unless these artists can produce something remarkable, it seems global music sales are destined to fall in 2003 for the 4th consecutive year. Hotels Accommodation |
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