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Tuesday, 23 November, 1999, 16:15 GMT
EMI aims for digital dividend
David Bowie David Bowie is in the vanguard of internet music

Music giant EMI believes that about 10% of its sales will be made via the internet within five years.

The label has up to 30 deals in the pipeline to accelerate its transition into new media.

It also said it was also hoping to set up a joint venture with a fellow music publishing company to look after its manufacturing and distribution operations.

EMI chairman Eric Nicoli, appointed earlier this year, said the company would spend "tens of millions" over the next six months "on internet related projects".

London-based Market Tracking International recently predicted that music bought via the internet will account for 11% of global music sales by 2005, compared with 0.5% last year.

Most of EMI's investment will be to transfer its vast back catalogue into digital form, plus infrastructure projects.

Design-your-own CDs

The opportunities opening up via the Internet were "enormous" but Mr Nicoli admitted that not everything will work.

"We must participate, it's no option to sit on the sidelines," he said.

In the first half of the year, EMI clinched five deals, including taking a stake in musicmaker.com, a site through which customers can create their own compilation CDs.

It had taken stakes in, or now owns companies including Liquid Audio, which supplies software to deliver music online and Digital On-Demand, which is pioneering retail kiosks where shoppers can choose the music they want and download it onto a CD.

Mr Nicoli also said a number of the group's artists had been looking to join David Bowie in using the internet to sell their music.

He said the experiment to sell Bowie's latest album via downloading off the internet, was a "success", even though sales were not much more than 1,000.

Queen and Genesis big hope

EMI group sales for the first half year, in total, were 9% higher at 1.08bn.

Japan, South East Asia and Latin America had seen "significant recovery" helped by success of artists such as the Backstreet Boys and Britney Spears.

But in Europe EMI's sales had been flat, with declines in both the UK and Germany.

The US had been the only major market showing strong growth, the group said, driven by "strong releases and a robust economy", although EMI's market share fell, reflecting its music release schedule biased towards the second half.

Overall, pre-tax profits for the six months were 67.2m against 41.7m in the same period last year, excluding the HMV group which EMI holds a 43% stake in.

EMI said sales in the UK had been held back partly because a number of big-hitter albums are scheduled to be the released for the millennium.

Among artists EMI hopes shoppers will be snapping up are albums from Genesis, Queen, Tina Turner and Paul McCartney.

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