Universal Music Parent Vivendi Reports Earnings Boost

Vivendi, owner of Universal Music Group, posted a 16 percent rise in earnings for the first quarter of the fiscal year. Chief Financial Officer Philippe Capron said that they “can see some impact of the recession on our activities, but most are protected by subscriptions.” Primarily the millions of subscribers to World Of Warcraft, the online multiplayer game from Vivendi-owned Activision Blizzard.

Universal Music was able to maintain its earnings at $1.04 billion, with digital sales accounting for 28 percent of recorded music sales revenue. The artists seem to be in good hands, and the upcoming partnership with Google to create the music video site Vevo.com, could amend declining CD sales.

Unsurprisingly, U2, Lady Gaga and Taylor Swift made the most money for Universal, but it looks like video games and recently bought Internet service provider Neuf Cegetel contributed more to Vivendi’s increase in earnings. Nevertheless, the media giant is confident that it will achieve its 2009 goals for earnings growth, and doesn’t expect to have difficulties getting through the economic recession.

That’s guaranteed survival for Universal, but Vivendi’s fortune still doesn’t solve the industry’s problems. Other major and indie labels are still grappling with the realities of plummeting sales, file sharing and the economic crisis. Maybe Universal is proof that the music business won’t die, but it has the financial support of a parent company that has other ways to make money if things go sour.

Can Vivendi live up to its promises? How will the other labels perform this year?

Source: Guardian, Forbes