French market sees first-half slump

Sony BMG, SNEP chief says figures not surprising

PARIS -- The wholesale value of the French market decreased to 278.7 million euros ($390.74 million) in the first half of 2008, down 12.2% from the corresponding period last year, according to figures released by French trade body Syndicat National de l'edition Phonographique (SNEP).

This result compares with a 17% year-over-year shortfall registered during first-half 2007.

In a news conference held by SNEP in Paris on Wednesday, Christophe Lameignere, chairman and CEO of Sony BMG France and president of SNEP, said the figures were not a surprise and said, "We were more pessimistic in our forecasts." He added that the market was now focusing on major releases for the Christmas period.

Total digital sales for the year so far were up 56.9% to 36 million euros ($50.47 million). While stressing this was an improvement from the 13.7% raise during first-half 2007, Lameignere said this was partly because of extraordinary recoveries from digital services and to some major deals, including Orange signing the four majors up to its Musique Max service.

Of the 36 million euros, mobile services (excluding subscription services) generated 20.2 million euros ($28.32 million), up 59.5%, despite a 28% fall in ringtones, which are now worth only 4.67 million euros ($6.55 million). Internet downloads represented 12.45 million euros ($17.45 million) while streaming and subscription services generated 3.4 million euros ($4.77 million), 9% of the digital music market.

At retail, the French market generated 442.1 million euros ($619.82 million), down 17.1% compared to the same period last year. Digital sales were up 42% at 19.1 million euros ($26.78 million), not including mobile sales.

Both Lameignere and SNEP director general, Herve Rony expressed their concerns about the debates on the "Internet and creation" law being apparently delayed again. Supported by French President Nicolas Sarkozy, the law is notably designed to circumvent online piracy through a "three-strikes" scheme that would see persistent copyright offenders lose their Internet connection.

Rony reckoned at best it would be first discussed, but not voted on, by the end of the year.

"We need to know the rules of the game," he said, adding that the president still supports the law but also has other reforms to deal with.