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EMI looks to digital as download sales quadruple

But look to lawsuit stick rather than iTunes carrot for the cause

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The world's third largest music label, EMI, saw its revenues from digital music increase by more than 300 per cent in the six months to 30 September, the company said today.

Digital's contribution to EMI Music - one half of the group; the other is EMI Music Publishing - was up almost 500 per cent in the first half of the Group's fiscal year. During that time, Apple expanded its iTunes Music Store from the US to the UK, Germany and France, and Napster opened a UK store.

EMI's digital sales totalled £12.2m. That's just over two per cent of the music and movie group's total turnover, £851m, down 11.4 per cent on the year-ago half.

EMI made a pre-tax half-yearly profit of £36.9m, down from the £39.8m it announced this time last year.

The company noted that with a release schedule heavily biased toward the second-half of the year - and more so this year than has been the case in the past - the weaker H1 was not entirely unexpected. Early numbers for October and November showed a significant improvement over last year's monthly figures, it said.

EMI calculates that the global recorded music market fell 1.3 per cent during its first half, down from a ten per cent decline a year ago. The US market showed strength, Japan appeared to be stabilising, the UK was flat but the rest of Europe still "experiencing significant declines during the period".

Don't necessarily look to the rise of digital music as driver of resurgence, though the growth in digital revenues is impressive. EMI bosses attributed the turnaround more to the aggressive legal action brought by the likes of the Recording Industry Ass. of America (RIAA) against file-sharers than to the burgeoning digital market per se.

The lawsuits were having an "educational and deterrent" effect on music consumers, the company said.

"It's certainly had a significant impact on Germany," said EMI Music Chairman, Alain Levy. "There's no doubt that in Christian music, for example, when the lawsuits started, the legal downloads started to go up immediately."

"The legitimate digital music market continues to expand rapidly and we remain confident that digital represents a key driver for future industry growth," said EMI Chairman Eric Nicolli. ®

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