CD sales decline hits EMI revenues

Music label EMI signalled a decline in the popularity of the CD as its revenues for the format dropped by nearly a fifth.

The group's recorded music arm, home to stars such as Robbie Williams and Lily Allen, reported a 19.8% revenues drop from CD-based sales in the three months to the end of June; with digital downloading stealing market share.

But EMI offered hope that it was taking advantage of the switch to digital as it posted a 26% leap in digital revenues.

CD sales have been falling steadily in recent years as music downloading has taken off.

Music labels have been battling against digital piracy and the drop in demand for physical formats, hoping to capitalise on the boom in downloading by launching online download services.

EMI launched a venture with iTunes in May that offers music to be downloaded without digital locks, known as digital rights management-free products.

The group said: "Early revenue indications for this initiative are encouraging."

EMI's music publishing arm is also "holding up well", according to the group. Digital revenues for the music publishing division increased by 13.2%.

Music publishing assets are becoming highly prized in the industry with a number of private equity investors keen to secure a slice of the market.

The group, which is currently being taken over by financier Guy Hands in a £2.4 billion deal, also blames the drop in CD sales on a poor release schedule.

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