Some are now wondering whether Universal Music Group was wise to gamble
quite so much money on EMI’s recorded-music division, which it bought
from Citigroup for £1.2 billion ($1.9 billion) in an auction in November
last year.
Sales of recorded music have fallen by half in the past decade, from
about $13 billion in 2002 to $6.5 billion last year. Downloaded music is
much cheaper than the old compact discs. Indeed, thanks to widespread
piracy, it is often free.
Digital sales are rising, but are still only a fraction of what CDs used
to generate. Subscription services such as Spotify may appeal more to
tech-savvy music aficionados than to casual buyers who might once have
picked up a CD on the way home from work. Efforts to bundle music with
mobile-phone or pay-TV subscriptions have failed to catch on.
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