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The company recently announced it was drastically cutting CD prices to try to lure back music buyers, with Vivendi warning the initiative, while hoping for future improvement, "may have a negative effect for the near-term."
VIVENDI’S UP AT HALF-YEAR,
BUT UMG’S DOWN
French Multimedia Company Losses Are Down, Though Music Remains a Sore Spot
The sound of music is still striking a sour note at Vivendi Universal.

The French conglom’s first-half results showed sharply improving fortunes at its long-unprofitable media businesses, but a continuing deterioration at its large music unit, with piracy still the main culprit, according the the company.

Chairman/Chief Executive Jean-Rene Fourtou said the company would continue to be a single group with two main activities—media and telecommunications.

Vivendi reported a net loss of 632 million euros ($724.6 million) for the first half, compared to a year-earlier loss of 12.31 billion euros. Revenue tumbled 59% to 12.36 billion euros from 29.99 billion, because of asset sales aimed at reducing debt. The company, whose stock trades in both Paris and New York, reports its results under French accounting standards, having abandoned an earlier initiative to report under U.S. principles.

One of the bright spots for Vivendi was Canal Plus Group, its French pay-TV unit. After losing money for six years in a row, Canal Plus posted an operating profit of 245 million euros, compared with a loss of 68 million euros in the first half of 2002.

Universal Music Group continued to experience a sharp drop in sales. The unit reported an operating loss of 42 million euros, compared with an operating profit at last year’s halfway point of 169 million euros. The group's sales dropped 25% to 2.17 billion euros in the latest period. The company recently announced it was drastically cutting CD prices to try to lure back music buyers, with Vivendi warning the initiative, while hoping for future improvement, "may have a negative effect for the near-term."

Terrific.

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