Universal Music Group, the world’s largest music company, posted a 2 percent dip in revenue at constant currency in the first quarter as the industry-wide slowdown in the digital downloads started to impact the business.
Even though Universal Music had the quarter’s biggest selling album the Disney "Frozen" soundtrack and benefited from a "significant growth" in subscription and streaming services, lower download sales and the longer-term declining CD sales meant the overall sales fell.
UMG’s numbers point to the challenge for the industry. The hope is that streaming companies like Spotify and Rhapsody will grow rapidly as download sales from stores like iTunes have slowed markedly in major markets like United States – as much as 13 percent in the first quarter.
But to date the number of music fans paying around $10 a month for all-you-can-eat music streaming services has not grown fast enough to make up for the drop in download and CD sales.
UMG’s first quarter revenue was €984 million ($1.35 billion) down 9.8 percent from € 1.1 billion ($1.51 billion) when it includes the impact of operating the Parlophone Label Group which was sold to Warner Music Group last July.
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