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EMI Records Profits and Piracy
Tue May 20, 2003 10:27 AM ET
By Merissa Marr
LONDON (Reuters) - A clear-out of failed artists and fading labels helped EMI to higher annual profit on Tuesday, but music sales dived and it warned of more gloom this year despite new albums from stars such as Norah Jones and Lenny Kravitz.
Grappling with a biting industry slump, EMI Group predicted recorded music industry sales would shrink another five to eight percent this year as fans turn increasingly to copying music for free, sending its shares 11 percent lower.
After a sweeping revamp of its music business, British-based EMI racked up adjusted pre-tax profit of 177.3 million pounds ($290.2 million) in the year to end March, from 153.3 million. Analysts had forecast profits between 180 and 185.5 million.
But albums from Coldplay, Robbie Williams and the Rolling Stones failed to save the company's music sales which fell 11 percent to 2.175 billion pounds, dragged lower by a bigger than expected 12.6 percent fall in recorded music.
"We had piracy in all its forms, which was probably the biggest single contributor to market decline," said EMI Chairman Eric Nicoli, adding that the group's revamp also affected sales.
The $32 billion music industry has suffered from a lethal mix of rampant piracy, weak economies and competition from rival entertainment such as video games, forcing music companies to slash costs and re-assess their business models.
But the world's third-biggest music company said it was seeing signs of the key U.S. market bottoming out and had finally turned a profit there after five years of losses.
EMI shares were 11.5 percent down at 120 pence at 8:30 a.m. EDT as the company played down merger speculation.
MERGER RUMORS
In a move to secure a future in an uncertain industry, a number of music companies have held talks about potential tie-ups. Sources familiar with the situation say EMI has held talks with both Warner Music and BMG.
"We think we will make progress with or without participation in industry consolidation. Beyond that I have no intention of fueling speculation," Nicoli said.
Investors are concerned that EMI could be left out in the next round of consolidation after sources suggested that rival talks between Warner Music and BMG had made good progress.
"If EMI had said it wanted to be part of the last round of consolidation and didn't want to miss out on critical mass and cost savings, we could have seen its shares up by an equal amount," said Simon Baker, analyst at SG Securities.
EMI said it expected to outperform the industry this year with albums in the pipeline from multiple Grammy-winner Norah Jones, Janet Jackson, Robbie Williams and Kylie Minogue.
EMI launched a major overhaul last year, slashing 1,900 jobs, axing 400 acts and cutting debt better to cope with the slump. The company said it had subsequently more than doubled its recorded music margin to 8.5 percent from 4.1 percent.
Stripping out the effect of currencies, group revenues fell just over eight percent, broadly in line with a nine percent fall in the music industry as a whole, EMI said.
But the cuts in artists and labels and a longer-than-expected restructuring shaved EMI's global market share to 12.8 percent from 13.4 percent.
EMI draws 80 percent of its revenues from its recorded music business, but music publishing had been holding up better in the downturn. However, music publishing sales fell to 401 million pounds from 416 million due to currency movements.
(additional reporting by Janet Mcbride)
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| gimmekeef |
These guys slash jobs and raise cd prices while lining their own pockets then refer to piracy?What a joke!!!!Only $290 mil profit????? |
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| Sir Stonesalot |
Within 10 years, record companies will be a thing of the past. And the internet will be the tool that brings down the ivory tower. Instead of embracing the internet and using it to their advantage, record companies are fighting it. Dumb move.
As computers and technology get faster and better, the need for a record company, or for a distribution network, will be negated.
Bands will market their recordings directly to consumers, and make those recordings available via internet web sites. We will download the latest "album" and burn it directly to playable media. We will download the artwork and print it ourselves. The promo videos will be included.
Not long from now, ANY band or artist will be able to cheaply and effectively reach millions of consumers...WITHOUT the need of a major lable...and deliver their product. With NO MIDDLE MAN. Our cash will go directly to the artist...and not in a record company exec's pocket.
So sayeth the All Being, Master of Time, Space, and Dimension. |
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| Brown Sugar |
Also they dont do anything to improve their services.
For example: the new Blur album has been released May 06 in US and Europe, and down here in Brazil only yesterday (May 19). Meanwhile of course I made my own copy with files from Kazaa and - very important - bonus tracks!
Now I�m wondering if I will buy the official release, but I think I�m not. Last months I did the same with more than 100 releases.
Why should I stop and wait for the good will of record companies? Also, why pay $30,00 for one CD, when I got it for $2,0 or $3,0?
Instead better services they only know charge us more and more.
And about the artists, what a joke! Bunch of monkeys, not meaning offend the monkeys. They are too fucking lazy, huh?
There is not more intelligent life in the music.
Except for the Blur, I can�t say other record really good in last months or year. It�s very hard to find good stuff lately.
In Brazil we�re having a Bob Marley revival because the absolute lack of talents, local or not. It�s a shame!
[Edited by Brown Sugar] |
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| Sir Stonesalot |
I disagree BS. There are LOTS of great albums being released....just not many on major labels.
The major labels make finding good rock music a little difficult....but it isn't impossible.
You see, I feel that downloading an entire album from something like Kazaa is OK if you intend to buy the real thing. If you try out the new Blur album, and like it at all, BUY IT. Look man, if everyone just downloads the damn thing from Kazaa, and then doesn't buy it...the band's sales tank and they lose their deal. And we are not talking about just Blur...we are talking about EVERYONE who isn't a major label's darling. If you don't support bands that interest you...they will disappear.
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| Martha |
Geez, is it really gonna change to that level Stonesy? Shit, I gotta get a whole new computer set up AND a color printer if it's all true. Ugh! LOL
I have never downloaded anything off the internet yet. And don't plan to with the computer I have, I don't think it can handle it. Besides, I'm trying to figure out how to work with those emoticons first! LOL I have only dealt in trading the boots which makes me go right out and buy the artists music..because I after hearing the great live shows I then want ALL their CD's in my collection. I buy most of my music through BMG's music club because I get great deals on new stuff there.
I have a question..is downloading records off the internet giving people the same quality recording as buying the CD would provide? |
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| sammy davis jr. |
Boo hoo for the record labels....Fuck 'em- they've been ripping off musicians for years. However, if everyone quits buying music and downloads it off the net only, no one's gonna win. There needs to be a better solution, but I see none. As soon as someone buys a CD legitimately, another person will copy it, then eventually it ends up on the net for everyone to get for free. Kinda fucks the artist, wouldn't you say? |
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| Prodigal Son |
These labels can stick it. It just gives no-talent bums a reason to control the music market for their own greed and money-making strategies which ends up denying us any great music being made. If I did have a rock band, which no doubt I'd make sure played great music, and this was the situation, I'd wholly embrace the internet. Forget the labels and their big distribution. In ten years, it's true, you can market your albums to the internet and radio for exposure. With that, labels, which used to not be as annoying as they've become in the last 30 years as they've been big-buck corporations rather than music stables, will cease to exist. This is no big whoop.
"The Future's uncertain/The end is always near." |
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| Brown Sugar |
Anyway, I think in the future artists will not get lots of money like currently. They will have to show more talent and less greed...
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| Jumping Jack |
Give the music away for free. Pay for the show. It would put more emphasis on entertaining which is a good thing in my mind. Maybe it rids the world of no talent bimbos whose only talent is teasing a camera in a video. |
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| jb |
We have all known for a long time that the Stones album sales have been marginal at best.... |
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| Brown Sugar |
quote:
Sir Stonesalot wrote:
I disagree BS. There are LOTS of great albums being released....just not many on major labels.
(...)
Ok Sir, then gimme only 3 names of masterpieces releases in last six months.
By the way, the new Macy Gray�s album "The Trouble of Being Myself", released already in Brazil but not yet in US (don�t ask me why, have no clue) is simply great!
[Edited by Brown Sugar] |
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| TheSavageYoungXyzzy |
"Masterpieces"? We don't get a whole lotta those.
Some *good* albums, on the other hand?
1) The White Stripes, 'Elephant'
2) Johnny Cash, 'American IV (The Man Comes Around)'
3) Paul McCartney, 'Driving Rain' (yeah, 2001, but to hell with ya. It was that good.)
-tSYX --- Whatever happened to my rock'n'roll? |
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| jb |
Driving rain good...LMFAO! |
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| Brown Sugar |
Well, I�m, still waiting for Sir reply. I�m sure he will tell me some great titles.
But I agree with Savage, Driving Rain is good |
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| TheSavageYoungXyzzy |
quote:
jb wrote:
Driving rain good...LMFAO!
You sure as hell didn't buy it!
-tSYX --- I got my clipboard, my textbooks, lead me to the station, yeah, I'm off to the civil war... |
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| JaggaRichards |
I've burned about 10 copies of 40 Licks for friends.
Plus a pal is gonna burn me a copy of the new Zep live set when it comes out next week.
Too late to shut the barn door now......... |
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| Sir Stonesalot |
Sorry, life happened, had to be away for a few....
Anyhow, I'll give ya 4(I always give a little extra), my boy, plus another one that will be released next month....
1.) The White Stripes-Elephant
2.) Nick Cave-Nocturama
3.) Johnny Cash-When The Man Comes Around
4.) Cracker & Friends-O Cracker, Where Art Thou
And next month...a new album from Steve Wynn.
Lemme see JR...10 copies of 40 Licks @ a conservative $20.00 a toss...you just ripped our fave band out of $200.00. Good job. |
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| beer |
SS, i totally agree with you about the fact that excellent music is still being made, ya just gotta know where to find it. But, About ripping the Stones off from burning 40 licks, i don't agree. if ya reckon that by burning ten copies of 40 licks, JR ripped off the boys for $200.00, the exact same thing could be said about the Stones for ridiculous ticket prices. Don't get me wrong, I never complained about prices for tix and I'll gladly pay them to see the band. BUT, i just can't imagine the Stones, or any other huge band, being affected by this.
I think anything that will disrupt/damage/ or hurt major labels, is a good thing. These people are NOT, Have never been, and never will be music fans. |
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| TheSavageYoungXyzzy |
The list price for Forty Licks is around $30, versus Elvis's around $25. My friend who runs an independent record store had to sell his copies at $32 to make any sort of profit.
It does *not* cost the record companies $30 to make a double-CD set. They tried to milk them for all they were worth, and *that's* why they didn't get to #1, for all those who bitch and moan about it. Because the young kids who'd been smacked about by the success of The Beatles's 1 looked at these two new albums by famous old guys and said "One is $25 and one is $30" or, if you went to one of the big stores, "One is $20 and one is $23". Which do you think they bought?
The overpricing they did of Forty Licks is criminally obscene.
But you know what? They got away with it. And I'm willing to bet that in the end EMI made a hell of a lot more money offa this than whoever released the Elvis collection.
I still buy albums. I use KazaaLite to download a few tracks from an album to see if I like it, and if I do, I snag it. With the way record companies are overcharging, I don't have the money to waste on a bad CD.
-tSYX --- And if ya ever meet the midnight rambler... |
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| Brown Sugar |
Thank you very much Sir, I will look for your suggestions, in spite of being too sceptic lately regarding great stuff from rock groups.
Hey everybody, check Macy�s new album. It�s really a
breath of life...
[Edited by Brown Sugar] |
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| JaggaRichards |
quote:
Sir Stonesalot wrote:
Lemme see JR...10 copies of 40 Licks @ a conservative $20.00 a toss...you just ripped our fave band out of $200.00. Good job.
After shelling out a couple of grand for the last Stones tour, I guess I should be wracked with guilt-NOT!!!!!
LOL!!!! |
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| Sir Stonesalot |
Yeah, whatever. But it's people like YOU who are gonna fuck things up for people like ME.
I trade CDRs. CDRs of unofficial recordings. Stuff that was never intended to be released. I'm not taking anything out of the Stones bank account, because they were never gonna see a dime from the stuff I collect anyhow.
Laugh all you like. But what you did is called Piracey. And it ain't cool. I spent a pile of green on the last tour too...so what! That doesn't give me the right to steal from a band that I'm supposedly a big fan of. I'd rather the Stones have my money than just about anyone.
What YOU did pisses off the RIAA, gets their big hoarde of lawyers all in a twist...and then big brother starts opening our mail. That would put a severe cramp in my hobby. Think I'm exaggerating? Ask the lovely Parmeda what happened to her at the Post Office.
What I do is in the fuzzy gray area. What you did is completely in the red. Right now, big brother tolerates people like me. But if people like you keep on doing what you are doing, there will be a backlash...and chances are that I'll get caught up in too. And that ain't right.
Now to address some other folks. Xyzzy...the local Kmart is selling 40 Licks for $17.99. And it was only $19.99 when it first hit the racks.
I also realize that the Stones don't get dollar for dollar retail. They probably get about a buck a unit. Maybe some of you think I'm making a big deal about a mere $10.00...but JR ain't the only person out there doing it. Sawbucks add up to Benjamins real fast...and trust me, it's all about the Benjamins. The record companies and the RIAA won't give up without a fight.
If people would just treat officially released material with a little respect, we wouldn't have to worry about the gov't shutting down share sites like Napster, or copyguarded CDs...or getting a subpeona served on you and your music collection confiscated. |
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