EMI RECORDS (Ireland) had “an exceptional year” in the 12 months to the end of March last according to its managing director, with pre-tax profits falling by just 5 per cent.
Figures from Chart Track, which compiles the official Irish music chart for the Irish Recorded Music Association show that sales of music in the Irish market fell by 14 per cent last year.
Managing director Willie Kavanagh said strong sales of releases by Coldplay, Katy Perry and Joe Dolan helped EMI book a pre-tax profit of €4.5 million. Revenue for the year fell €600,000 to €17.8 million, primarily due to a 5 per cent drop in physical sales of CDs and other media. This was somewhat offset by a 36 per cent increase in digital sales.
Mr Kavanagh pointed out that digital sales were growing off “a tiny base” and said that paid downloads accounted only for 8 per cent of music sold in Ireland. The main outlets for EMI are Apple’s iTunes service, 7 Digital and Vodafone’s mobile service.
The accounts recently filed note that sales of recorded music are declining due in part to “economic recession, physical piracy, illegal downloading and growing competition for discretionary consumer spending and retail shelf space”.
EMI was one of four record labels which made an out-of-court settlement with Eircom this week which will see broadband users accounts terminated if they repeatedly download music illegally.
The High Court heard evidence that the four major record labels are losing €14 million annually as a result of downloading.
The music industry has also suffered from a downturn in the retail sector. Zavvi, formerly Virgin Megastores, with 14 shops on the island of Ireland, is in liquidation, but Mr Kavanagh said HMV’s decision to buy five of the shops has “stemmed the flow of that to some extent”.
In Dublin, long running independent shops Abbey Discs and Road Records have also closed in recent months.
Although it paid a €10 million dividend to its parent in 2007, the company did not pay one last year. EMI had retained profits of €12.5 million at the end of its 2008 financial year.
During the year in question, EMI Group was acquired by private equity group Terra Firma and delisted from the London Stock Exchange.
EMI Ireland maintained employment at 15 staff, but the cost of wages, social welfare contributions, pension costs and share-based payments was reduced from €1.56 million to €1.4 million between 2007 and 2008.
