Morris' troops finished with a commanding 27.6% of the 2001 current marketshare pie, adding up to powerhouse earnings for parent company Vivendi Universal.


Columbia Wins Label Race
Doug Morris and Donnie Ienner had a very happy holiday.

The year 2001 ended as it began, with the dominating Universal Music Group pushing the other label groups around the retail playground, while Columbia Records stood at the top of the label pile. Morris' troops finished with a commanding 27.6% of the 2001 current marketshare pie.

For the year, UMG's biggest sellers were Shaggy (MCA, 4.5 million), the O Brother Where Art Thou? ST (Mercury/IDJ, 3.4m), Nickelback (Roadrunner/IDJ, 2.6m) and Nelly (Fo' Reel/Universal, 2.4m). Naturally, those sales add up to powerhouse earnings for parent company Vivendi Universal. In 2000, UMG's EBITDA (earnings before interest, taxes, depreciation and amortization) was a billion dollars, and it looks like they'll beat that number for the year just ended. Some analysts speculate that UMG's EBITDA figure is more than double that of the rest of the Big Five combined. Yes, Mr. Messier, you're not just in the water and waste-management business any more.

Speaking of EBITDA and other accounting jargon, the term to learn at Warner Music Group in 2001 was "purchase-price accounting." The phrase refers to costs that can be written off against an acquisition by bean-counters, e.g., America Online's purchase of Time Warner. WMG's 20001 EBITDA has been down compared to the previous year in each of the three quarters reported so far. In a conference call Monday (1/7), AOLTW CFO Wayne Pace said that WMG's EBITDA for 2001, when reported, will show a 20% decline, but predicted a turnaround this year. Things are already looking up, with WMG notching three of the five top-selling albums of 2001 in Linkin Park (Warner Bros., 4.8m), Enya (WB, 4.4m), Staind (Flip/Elektra, 4.2m), thanks to a strong surge in Q4.

BMG's marketshare was down more than 2% in 2001—mirroring the decline in teenpop sales. Though the label group finished the race in second place at 16.9%, the BMG and Sony numbers are a virtual dead heat. With owned-and-operated labels accounting for less than 10% of its share, BMG's troubles extend to the bottom line. Because it is privately held, earnings figures aren't available, but insiders say that for the fiscal year that ended July 1, the company lost $150 million. BMG has said publicly that this period was the worst in its history. And the bleeding hasn't stopped—those same insiders say that the last half of '01 was as bad as the previous 12 months. BMG's best sellers were NSYNC (Jive, 4.4m), Alicia Keys (J Records, 4.1m), Creed (Wind-Up, 3.6m), Dave Matthews Band (RCA, 2.9m), Britney Spears (Jive, 2.9m) and Usher (Arista, 2.7m).

For the year, Sony remained solid, with its marketshare remaining at  about 17%, thanks to the strength of #1 label Columbia and #4 label Epic. Sony's biggest records were Destiny's Child (Columbia, 3.7m), "Now Vol. 6" (Epic, 3.1m) and Jennifer Lopez (Epic, 3.0m).

EMI experienced turmoil at the top and trouble at the bottom line,  even though the company's marketshare rose from 8.7% last year to 11.3% this year. EMI's biggest successes for the year were "Now Vol. 7" and "Now Vol. 8" (Virgin, 2.9m, 2.4m respectively), The Beatles' 1 (Capitol, 2.9m) and Janet Jackson (Virgin, 2.6m).

On the label side, Columbia was the big winner in both current (8.4%) and catalog (8.3%). No surprise there, as Big Red has consistently been the top dog during the decade-plus of the Ienner era. Columbia had hits from Destiny's Child, Train (1.9m), "Now Vol. 5" (1.4m), System of a Down (1.3m), Jagged Edge (1.2m), Crazy Town (1.2m), Maxwell (1.2m), Lil' Bow Wow (1.2m) and Aerosmith (1.1m).

Second-place current was Interscope Geffen A&M, which nailed down 8.3%. That number includes DreamWorks' piece of the action, which IGA distributes. IGA's biggest records in 2001 were Limp Bizkit (Flip/Interscope, 2.4m), D12 (Shady/Interscope, 1.8m), 2Pac (Interscope, 1.8m), Enrique (Interscope, 1.7m), U2 (Interscope, 1.7m), the Moulin Rouge ST (Interscope, 1.6m), Eve (Ruff Ryders/Interscope 1.4m) and Weezer (Geffen, 1.2m). DreamWorks had Lifehouse (1.9m), Nelly Furtado (1.8m), Alien Ant Farm (1.5m) and Toby Keith (1.3m), along with million-plus sellers the Shrek ST, Puddle of Mudd and the Isley Brothers.

The other two top labels were Lyor Cohen's Island Def Jam with 7%, and Polly Anthony's Epic, which finished in fourth with 6.3%. IDJ scored not only in the rap world but also led a charge into rock, with hits including the O Brother ST and Nickelback, Ja Rule's Pain is Love (Murder Inc./IDJ, 2.0m) and Rule 3:36 (1.9m), Jay-Z (Roc-A-Fella/IDJ, 1.9m), Ludacris (Def Jam South/IDJ, 1.7m), Sum 41 (1.4m), DMX (DefJam/IDJ, 1.4m) and Musiq Soulchild (Def Soul/IDJ, 1.1m).

Epic scored with "Now Vol. 6" and J.Lo, plus Michael Jackson (1.6m), Sade (1.5m), Jill Scott (1.4m), Ginuwine (1.2m), and million-plus-sellers Fuel, Shakira, Incubus and 3LW.
Rookie of the Year honors go to Clive Davis' J Records, which had four records debut in the Top 10. Also notable were the strong Q4 showings of Usher and Pink for Arista, and Enya and Linkin Park for Warner Bros., which helped WB push above the 5% marketshare level.

For music groups, last year's finishing order was UMG (28%), BMG (19.4%), Sony (17.1%), WMG (14.3%) and EMI (8.7%).

MUSIC GROUPS (2001 marketshare ranking)
1. UMG 27.6%
2. BMG 17.0%
3. SONY 16.9%
4. WMG 15.1%
5. EMI 11.3%

TOP 10 LABELS (by 2001 marketshare)
1. Columbia 8.4%
2. IGA   8.3%
3. IDJ  7.0%
4. Epic   6.3%
5. Warner Bros. 5.3%
6. Jive 4.9%
7. Virgin 4.5%
8. Arista  3.9%
9. Universal 3.8%
10. Atlantic 3.4%
Team Lipman doubles up. (11/26a)
Season's bleatings (11/23a)
Deck the Grammys with boughs of Holly. (11/24a)
Rolling out our U.K. Special print issue (11/24a)
Olivia, the Biebs, H.E.R., Doja Cat, Billie and Jon Batiste lead the way. (11/24a)
Stuffing (in face).

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