Vivendi lifts share of US music market to 29 per cent

By Susie Mesure
Saturday 04 January 2003 01:00

Vivendi Universal has extended its lead over its music major rivals in the US, the world's most valuable music market, after selling more CDs than any of its competitors.

Universal Music, home to artists such as Shania Twain, Shaggy and Ashanti, grew its US market share to 29 per cent from 26 per cent – nearly double that of its nearest rival, Warner Music, at 16 per cent, according to figures from Nielsen SoundScan.

It topped the list of best-selling albums with Eminem's latest release, The Eminem Show, which has sold nearly 7.5 million copies. In total, Universal had six of the top ten best selling albums in 2002, including the number two, Nellyville by the rapper Nelly, and 8 Mile, the soundtrack to Eminem's semi-autobiographical film, which was the year's fifth best-selling album.

The figures, for CDs sold in the US up to 22 December, will help to shore up morale at the embattled French media group. Vivendi had a torrid 2002. Low points included the ousting of its chief executive, Jean-Marie Messier, who presided over the collapse in the group's share price, and the subsequent decision by regulators in the US and France to investigate the company's accounts.

Vivendi, now run by Jean-Rene Fourtou, is selling off its assets to help reduce a $19bn (£12bn) debt mountain, amassed under M. Messier's grand plan of reinventing the former utilities business into a media giant. M. Fourtou and Edgar Bronfman Jr, the vice-chairman, have suggested Vivendi could spin off its US media interests, which also include Universal Studios.

Overall, sales of CDs in 2002 plunged 9.3 per cent to 624.2 million, the second consecutive year-on-year decline after a 2.8 per cent fall in 2001. Record companies are struggling to make headway against music piracy, particularly on the internet where songs can be downloaded for free.

The three most popular music genres last year were R&B, alternative and rap. Universal is strong in all of these through its Def Jam and Interscope labels. A spokesman said the group was also helped by its strength in domestic music in the US, which accounts for 90 per cent of all music sold there. In the UK, the split is 50 per cent domestic, 50 per cent international.

Analysts attribute Universal's success in the music sphere on its mega-merger with PolyGram in 1998, which brought it labels such as Def Jam, Island and Motown. The deal was squeezed through just before regulatory authorities clamped down on further industry consolidation, buying Universal an unassailable market share lead. Vivendi later acquired Universal as part of its takeover of Seagram. It sold the drinks arm to Diageo and Pernod Ricard.

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