EMI falls into red on failed Warner tie-up
Will recover via Net music market
EMI, the world's third largest record company, said today its attempt to merge with Warner - itself soon to be bought by AOL - knocked an anticipated first-half profit into a loss.
Quite a significant loss, at that. This time last year, EMI reported a profit of £31.9 million ($45.3 million at today's exchange rate), or 4.1 pence a share. Today it reported a loss of £31.3 million ($44.6 million), or 4.0 pence a share.
EMI actually made a profit before tax, only to see it driven down to the reported figure by one-off items. No wonder, having been effectively refused permission by the European Union to join up with one fellow major music company, it's now courting another, Bertelsmann Music Group (BMG).
EMI has around ten per cent of the US music market and just under 19 per cent of the European arena. Sales rose 12 per cent in the US, over the six-month period, which rather scuppers the company's allegation - made through the Recording Industry Association of America - that Napster is killing the music business.
Quite the reverse, in fact - it's pointing the way forward. EMI said it is looking to the online market to improve its standing. It expects to have 20 per cent of its sales through online retailers - in a mix of CD sales and digital downloads - by 2005.
EMI yesterday announced three new digital music distribution partnerships, with Streamwaves in the US, and In Demand and DX3 in Europe - just three of the 27 new media companies EMI has invested in or signed alliances with. ®