EMI: Steep Losses and DVD-As

Citing poor sales in North and South America, EMI reported that it lost $77.6 million during the first six months of its business year, ended September 30, compared to a loss of $44.3 million for the same period last year.

A substantial chunk of the loss was attributed by outside experts to EMI's $80 million contract with pop diva Mariah Carey, whose recent movie Glitter came and went in a heartbeat after it was almost universally excoriated by critics. EMI had high hopes for the soundtrack album, which hasn't performed any better than the film. The company expects new releases from Garth Brooks, Lenny Kravitz, and others to pick up some of the slack during the winter holiday season.

EMI's troubles are part of a larger pattern of problems for the music industry, whose profits have been hampered by slow CD sales, exacerbated, some executives assert, by the availability of CD burners. The Recording Industry Association of America's (RIAA) mid-year report noted a 9.4% decline in the shipment of all music products by the middle of 2001 compared to the previous year: 442.7 million units vs 488.7 million, or a dollar-value difference of $5.9 billion vs $6.2 billion, according to figures published in a mid-November report in the Wall Street Journal. The dollar-value drop was only 4.4%, due to industry-wide price increases instituted to offset declining sales.

Perhaps hoping that the nascent market for high-resolution recordings will jump-start its profit engine, EMI has committed to releasing some titles in the Super Audio CD format, as previously reported. The British music conglomerate has also endorsed the DVD-Audio format, according to an announcement in November, and will release "a full slate of DVD-Audio titles" in December.

Among EMI's DVD-A issues will be Leon Russell's Retrospective, Eric Johnson's Ah Via Musicom, and Al Green's Greatest Hits, all to be mastered and pressed by Panasonic, and all of them back-catalog titles. More and newer DVD-A titles will be forthcoming this winter and spring, according to EMI Music Distribution president Richard Cottrell. "We are excited to build sales for our artists and retailers by opening our wonderful catalog to this new music format," he was quoted in an EMI press release. Warner Music is the only major label to have made a serious effort with DVD-A so far, having released a collection of classical titles and a smattering of others in the rock, jazz, and country genres.