EMI’s Decrescendo

EMI, one of the big 4 record labels, continues to struggle. Last year, they controlled 10% of the recorded music market, and that is now down to 9.5% this year. They also just released numbers showing a loss of US$1.2 Billion for year ending March 31. At least they were blunt about the cause – “continuing underperformance from EMI Music.”

This loss is more than double the loss of US$454.5 Million from the previous year. And while EMI was upfront about their knowledge that a lack of big sellers was a main cause, Maltby Capital’s chairman Lord Birt also blamed some accounting measures:

“The main factor behind the very large loss was continued operational poor performance, but more particularly accounting factors, in particular the revaluation of the balance sheet and the requirement to mark assets and liabilities to fair values.”

Despite the dismal performance, Lord Brit offered some hope for the future of EMI:

“Operating performance for the full year continued to be poor and this reflected long-term weaknesses in EMI Music. EMI’s operational performance has improved significantly during the first seven and a half months of Maltby ownership and we expect the six months results ended 30 September 2008 to show year on year improvement. EMI now has a stronger balance sheet and team with which to start a new era.”

Well, we will see if those Sept ’08 results are any better. My guess is no.

Stay tuned,
Erik
erikrostad.com