Vivendi warns of further decline

FRENCH media conglomerate Vivendi Universal had grim tidings for the fast-consolidating music industry today as it warned of a further sales decline next year.

Restructuring Vivendi reported a nine-month net loss of e501m (£349m) on revenues of e18.2bn, weighed down by falling sales and continued losses at its Universal Music Group (UMG).

Rocked by a 22% sales slide to e3.28bn, the group's recorded music business, the world largest, lost e38m in the first nine months, after making net profits of e185 million in the same months of last year.

The figures, published only days after former Vivendi director Edgar Bronfman Jr agreed to buy rival Warner Music for $2.6bn (£1.5bn), confirm that the global music industry is in dire straits.

Like British rival EMI, UMG and Warner have been hit by on-line music piracy and the rise of rival entertainments, particularly video games, which now surpass music sales in many markets.

'UMG is in the process of instituting significant costcutting initiatives that take into account the realities of the declining music market,' Vivendi said.

'There may be negative implications on near-term results,' it said, despite fourth-quarter releases from Sheryl Crow, Bon Jovi, Busted, Luciano Pavarotti and French stalwart Johnny Hallyday.

Vince Power's Mean Fiddler group has bought the 275-capacity Borderline music venue in Soho for an undisclosed sum. The deal extends Mean Fiddler's portfolio of live music venues in the West End to seven.

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