2000 Saw Worst Profits In Years For U.K. Music Biz

A new report indicates that declining profitability at U.K. music majors caused the country's overall record industry last year to slide to its worst operating-profit performance since the early '90s.

The U.K. Record Industry Annual Survey 2001?which analyzes published accounts filed by about 80 record labels, distributors, retailers, and manufacturers?indicates that profits for the majors shrunk from more than £140 million ($200 million) in 1999 to about £75 million ($107 million) last year. The decline resulted in a 30% drop in overall profits to £177 million ($253 million). Furthermore, the study predicts that overall profits will fall to about £100 million ($143 million) in 2001, due to the "downward trend in profits at the majors and in key retailers."

The survey, which was published by Media Research Publishing, highlights the independent sector's return to profitability for the first time since 1995. That result offset the decline in the retail sector. On the back of the massive success of such artists as Britney Spears, Backstreet Boys, and Steps, leading independent company Zomba entered the top-five on the list of companies generating the most operating profit, with £13.375 million ($19.13 million). HMV Music and Virgin Records top the list, with £38.481 million ($55 million) and £33.323 million ($47.67 million), respectively.

Instant Karma managing director Rob Dickins' salary last year of £966,000 ($1.4 million) puts him at No. 9 among U.K. company directors, in the first full year of the Sony-backed company's operations. Ken Berry's £3.8 million ($5.4 million) salary ranked the former EMI Recorded Music CEO at No. 1, nudging his former colleague, EMI Music Publishing CEO Martin Bandier, into second place with an annual income of £3.62 million ($5.2 million).