Universal Music Group hit hard by Lady Gaga’s album flop | New York Post
Lady Gaga’s “ARTPop” album last fall certainly didn’t give Universal Music Group any pop.
Gaga’s fourth-quarter flop helped cut Universal’s revenue in the period 9.3 percent, the company said in a report Tuesday.
The tough Japanese economy — which accounts for 25 percent of global music sales — also hurt.
Earnings before interest, tax and amortization, or Ebita, was off 11.1 percent, or 7.8 percent on a constant-currency basis.
The tough quarter cut profits for the year by 2.9 percent, to $702 million (511 million euros).
They were up 1.4 percent on a constant-currency basis, the company said.
Full-year revenue rose 7.5 percent to $6.7 billion (4,886 million euros) or 12.8 percent when adjusted for currencies.
For the year, Universal Music’s best-selling albums were from EMI’s Katy Perry and Interscope’s Eminem.
UMG reported a 75 percent jump in subscription and streaming revenue, though it didn’t break out a number.
The music company, long the focus of sale speculation amid chaotic changes at its France-based owner, Vivendi, seems to be staying put for now.
Vivendi is planning to separate the music group and its France-based pay-TV operation, Canal Plus, into a new division while it sorts out its telecom assets.
Claudio Aspesi, a senior analyst at Bernstein Research, told investors Feb. 25 that “Vivendi seems open to potential future acquisitions in media,” but to acquire a new leg to the company could be a mistake.
“The key,” Aspesi continued, “is for the UMG-EMI company to avoid the most worrying strategic pitfall of acquiring a new leg altogether with limited or no synergies with the existing portfolio of TV and music assets.”