Monday, January 30, 2006

Vivendi Universal has weak quarter

Vivendi Universal ended a positive 2005 with a weak last quarter. And their achilles heal seems to be their music and games division. They were only saved by double digit growth from SFR, its French mobile telephone operator.

Full year revenues rose an impressive 9% to €19.5bn from €17.9bn a year earlier. All divisions grew overall. The 4th quarter slump in games probably demonstrates more than anything the volatility in consumer games revenues. Which proves how important it is to have a large stable of games, so that the portfolio effect can come into place.

The music divisions slump is perhaps more concerning, particularly as it was during the holiday (Xmas) season. I wonder whether the continuous drive to digital music sales is hurting Universal Music more than others.

But the loger term should look OK for Vivendi, as their combination of technology and media assets looks like the right mix for the converged media and telco world were moving towards. Their lack of international clout could restrict in the future. How about them merging with the perhpas soon to be public Berlesmann!

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