GLOBAL MUSIC SALES DOWN
OVER 10%

The International Federation of the Phonographic Industry (IFPI) reported today that global unit-sales of recorded-music for the first six months of 2003 fell by 10.7% compared to last year, which saw a 7.2% drop. The decline was 10.9% in value terms, falling to $12.7 billion for all recorded-music formats, including music video, from $14.3 billion for the first half of 2002.

"It's a very difficult landscape to fight back against, but we are,” IFPI Chairman Jay Berman told Reuters. “We have gone through the worst period and we have enough positive signs about how online business models can go forward." Berman, however, noted that the biggest music markets—the United States, Japan, France and Germany—had experienced unusually steep declines.

On the other hand, sales in Austria, Finland, Russia and the UK actually increased, while Hong Kong and Australia showed signs of a recovery.

Meanwhile, the IFPI said it expects stronger numbers out of the second half, projecting the full-year sales decline to fall somewhere between seven and eight percent.

Interestingly, that’s all it took to give EMI shares a four-percent lift early today, with trading nearly reaching its average daily volume by noon.

At least some observers are bullish about EMI’s prospects, particularly with regard to its bid for Warner Music Group.

"We believe that EMI is best placed to pursue a deal with the recorded music division of Time Warner, that the deal would be cleared by regulators, and that the deal would—subject to structure—be materially enhancing to EMI's earnings and therefore valuation," an analyst told Reuters.