EMI sees swing to Net for music sales

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The Independent Online
EMI, Britain's largest music group whose roster of artists include the Beatles and the Chemical Brothers, yesterday forecast that 10 per cent of music sales would move onto the Internet within five years. Eric Nicoli, who took over as chairman this year, added that EMI has around 20 Internet deals in the pipeline to take the group to the forefront of the digital age.

Reporting an upbeat set of half-year results, Mr Nicoli said opportunities for music companies in new media were enormous. "We have to participate in this market. There is no use sitting on the sidelines," he said. "Earnings will be lumpy. Some initiatives will flourish, others will not."

EMI's half-year figures showed the company made pounds 24.8m profit from five Internet deals signed in the past year. These have involved EMI making its back catalogue of music available to new technology companies in return for equity stakes. EMI has valuable shares in companies such as Digital on Demand, which develops retail kiosks for the digital downloading of music on to recordable CDs, and Liquid Audio, which supplies software that enables music to be delivered online.

It has struck other deals with Sanity.com, the Internet division of Australia's largest music retailer, and musicmaker.com, an Internet company that enables customers to make their own CD compilations. Mr Nicoli said David Bowie's decision to make his album available online had been successful although only 1,000 had been downloaded.

The e-commerce initiatives were the star turn of a good set of results which saw half-year profits rise 72 per cent to pounds 86.5m. Sales were 9 per cent up at pounds 1bn. EMI said it would sell its stake in HMV Media, the HMV and Waterstone's group, when the company seeks a market flotation, probably next year. The shares closed up 19p at 503.5p.