Despite rising profits, the record label behind some of Ireland's top musicians still fears pirates
Revenues were up at Universal Music Ireland last year, but CD sales continue to fall.
THE IRISH ARM of one of world’s biggest music publishers recorded higher revenue last year despite a dip in CD sales and predictions of difficult times ahead for the industry.
Universal Music Ireland, which handles distribution for high-profile Irish acts such as Hozier and Little Green Cars, as well as international artists like Mumford and Sons and Sam Smith, saw gross profits at the company jump by €2.7 million to pass the €6 million mark.
Accounts just filed for the Universal Music Ireland also showed that revenue at the company grew by roughly €770,000 in the year that ended 31 December 2015, pushing total revenue at the company over €13.2 million.
Although gross profits and revenue increased, there was a significant dip in profits between 2014 and last year, with the operating profit at the company falling from roughly €13 million to just under €1.5 million.
The firm booked the huge profit in 2014 after Universal Music’s acquisition of EMI Records, which resulted in a group loan between the two companies worth €13.4 million being waived.
Without the one-off accounting windfall, however, the company would have made a loss of nearly €350,000 in 2014.
Singer Sam Smith
Piracy
Despite the company trading in the black again, a directors’ note attached to the annual accounts forecast difficult times ahead of the company – citing piracy as one of its main headwinds.
“External risks for the company include the ongoing recovery from the economic recession and its impact on the Irish music market and challenges to that market from factors such as privacy and illegal downloading,” the filings stated.
The accounts also showed that the company’s CD sales continued to fall, with the revenue stream dropping nearly €400,000 to €6.2 million last year.
However, fees from the royalties and licencing of its artists’ music rose by over €860,000 to nearly €7 million. Distribution fees also soared from roughly €14,000 to over €300,000.
The Record Industry Association of America has claimed that since the turn of the millennium, when online music downloads first hit the mainstream, revenue from music sales has been slashed in half.
