Universal Music Group revenue drops 5% on declining CD sales; digital sales jump 54%

“Vivendi SA said Wednesday that its Universal Music Group, the world’s largest music provider, saw revenue dip 3.1% in the fourth quarter, as declining sales of physical albums took a toll on results,” David B. Wilkerson reports for MarketWatch.

“In the quarter, the Vivendi unit said revenue fell to 1.61 billion euros ($2.38 billion) from 1.66 billion euros ($2.45 billion) in the year-earlier quarter,” Wilkerson reports. “Excluding the acquisitions of BMGP and Sanctuary and at constant currency, revenue dropped 5%.”

“Digital sales jumped 54% to 188 million euros ($278.2 million), at constant currency, with strong growth in online and mobile phone categories,” Wilkerson reports.

“Since the advent of music file-sharing in the late 1990s, sales of CDs have been on the decline,” Wilkerson reports. “The introduction of Apple Computer Corp.’s [sic] iTunes platform in 2001 sped up the downturn in the CD’s popularity.”

Full article here.

[Thanks to MacDailyNews Reader “Gavin” for the heads up.]

29 Comments

  1. I’ll try wearing an analyst’s hat for a moment with an alternative comment.

    The advent of Apple’s iTunes Music Store, greatly increased the market for digital downloads which are far more profitable than CD sales and reduced free music downloadson file sharing networks.

  2. Enough is enough.

    Their revenue is falling because the product they are bringing to market is not compelling people to pay for it.

    Delivery methods will always evolve, so let’s not try to mask the failure of a business to market valuable merchandise.

  3. “The introduction of Apple Computer Corp.’s iTunes platform in 2001 sped up the downturn in the CD’s popularity.”

    There is no evidence that iTunes killed the CD, but there is much evidence that iTunes increased demand for digital music file sales. CD and MP3/AAC are NOT mutually exclusive as most iTunes users (Macintosh and Windows) actually purchase more CDs than people who do not use iTunes and most music on an iPod is ripped from purchased CDs.

    Where do these people get off with wording that is so wrong, yet can be misinterpreted as being correct by people who do not know better?

  4. They said “”Since the advent of music file-sharing in the late 1990s, sales of CDs have been on the decline,” Wilkerson reports.”

    Yea, blame the decline on stealing vs the never ending greed of the music company. Sales of CDs will continue but like said above, we the buyer want VALUE for our money, not jets for CEOs of music companies.

    en

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