CD sales at the Irish arm of the music giant that counts U2, Madonna and Lady Gaga amongst its artists, dropped by one third last year — contributing to a 62% drop in pre-tax profits.
Newly-filed accounts for Universal Music Ireland show a drop in pre-tax profits to €596,515, last year, with revenues down by 16% to €12m.
A breakdown of the revenue figure shows that the firm recorded a 32% drop in CD sales last year, from €10.3m to €6.9m. In 2010, Universal Ireland generated pre-tax profits of €1.5m.
According to the directors’ report: “Turnover decline in 2011 was due to difficult trading conditions as a consequence of the economic recession, combined with piracy and illegal downloading.
“Despite a fall in turnover, the company maintained its leading market share in the Irish music market in 2011.”
On the risk and uncertainties facing the company, the directors state that “external risks for the company include the economic downturn and its impact on the Irish music market and challenges to that market from factors such as piracy and illegal downloading”.
The figures show that the firm’s profits were hit last year by €117,801 spent on staff redundancies; this following €33,526 spent under the same heading in 2010.
The filings show that the firm employed 15 people at the end of last year, with 13 engaged in selling and distribution along with four administration. Staff costs totalled €1.4m.
Remuneration, including pension contributions for the firm’s two directors, Mark Crossingham and Cathy O’Loughlin, dipped from €503,503 to €467,562.
The sharp drop in CD sales contrasted with Universal Ireland increasing its royalty and licence income by 26% — from €3.4m to €4.3m. The firm’s income from distribution fees increased by 23% from €550,826 to €679,562.
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