Uni Music Group not for sale

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CANNES -- Jean-Bernard Levy, chief executive of entertainment and telecommunications firm Vivendi, confirmed on Saturday that Universal Music Group is not for sale.

Levy was at the annual music and Internet conference MidemNet to talk about that side of the company's activities, which he said he was very optimistic about.

"I feel there is a lot of hope, growth and value with talent that is very popular," he told a packed audience of attendees. "There has been a dark cloud but it's not as bad as some people think."

Levy, who has seen UMG's margins increase from 3% in 2003 to 20% in 2007, said he believes there is still a future for the compact disc.

"There is a wide population of consumers that will continue to buy physical products. Many people still want to buy a full album from an artist they like and not download just a couple of tracks," he said. "There has been a decline so we are trying to organize a migration but there will be a variety of products with TV, the PC and telephony all trying to be consumer friendly with music."

UMG has launched trials making music tracks available on the Internet without Digital Rights Management and Levy said, "We are still testing. Our policy is that we are strongly attached to DRM for subscription models and advertising-based models."

But he added: "Another debate, more important for the consumer, is interoperability. It's more important than how many copies can be made. We have to hope that will be more interoperability in the future. But we are watching consumer patterns and we'll see."

UMG, he said, was aiming at a 360-degree business model and with the acquisition of BMG Music Publishing and Sanctuary it had doubled the size of its music publishing and added artist services and management. "We are lucky at Universal Music that we have great artists and great management that is willing to develop those artists," Levy said. "Our role is not only to produce records but to help artists develop in all aspects of their careers."

Asked if there was any chance of spinning off UMG, Levy said: "No. I am committed to Universal Music. In 2003, the numbers were not good but we have used the Internet in our favor rather than fighting it and the numbers have gone up."

He said there is no reason to be scared by the digital world.

"Digital is getting greater every day because of technology and globalization but if we can create the right content then we will continue to expand and be successful," Levy said. "We have big digital platforms serving millions of consumers. Vivendi's business model is a good one."





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