Vivendi Chief: Music Industry Doom Exaggerated

From Reuters:

Vivendi Chief Executive Jean-Bernard Levy has no plans to spin off the music unit Universal and he said on Saturday he believed the gloom surrounding the industry had been over done.

Speaking at the annual Midem conference, Levy said the music industry was going through a huge transition at the moment, with new business models for mobile and Internet services appearing all the time.

But he predicted there would still be a viable market for physical products like CDs for many years to come and he said the industry's future lay, as always, in spotting the right creative talent.

"I think altogether today there is an exaggeration in the industry," he told the conference. "Of course it is not doing that well, but look at us, we have flat revenues, a good two digit margins and it's not as dark as what many people describe."

"Back in 2003 the numbers didn't look very good," he said "(But) as a shareholder of Universal, I have seen the numbers go up quite sharply. We had in '03 a 3 percent operating margin business and we have today a 12 percent operating margin business.

Link

Universal Music Group (UMG) and XM Satellite Radio Reach Agreement on Pioneer Inno

From CNN Money:

Universal Music Group (UMG), the world's leading music company, and XM Satellite Radio, the nation's leading satellite radio company, today announced that they have resolved the lawsuit brought by UMG against XM over its Pioneer Inno, a portable satellite receiver with advanced recording functionality. The companies did not disclose terms of the deal.

As part of the agreement, UMG becomes the first music company to reach a multi-year deal covering all XM radios with advanced recording functionality, including both those currently available as well as future product releases. In addition, UMG will withdraw as a party to the complaint filed by the major record companies against XM in May, 2006.

"We are pleased to have resolved this situation in an amicable manner," stated Doug Morris, Chairman & CEO, Universal Music Group. "We pride ourselves on empowering new technology and expanding consumer choice. And XM is providing a new and exciting opportunity for music lovers around the world to discover and enjoy our content, while at the same time recognizing the intrinsic value of music to their business and the need to respect the rights of content owners."

Link

UMG Imeem Details Emerging

From Saul Hansell, New York Times:

It is still unclear how many sites will be able to make enough money from advertising to pay what the labels want. Imeem has given Universal some stock and a large upfront cash payment. The Financial Times reported that the payment was $20 million, although Imeem has disputed that figure.

The record labels have given Imeem a break on their normal fee of one cent every time a song is played. But in return they have asked for a share of the advertising, not just on the pages related to music, but on the whole site. So I’m not entirely sure how this model will work on a site that is simpler to use than Imeem and thus has fewer pages on which ads can be sold.

Link