Vivendi announced its Q4 2008 earnings today (press release and PDF of earnings release). Universal Music Group posts a 0.2% drop in its 2008 revenue and a 7.8% decrease in its Q4 revenue (both in constant currency). Annual revenues for publishing, artist services and merchandise all increased due to acquisitions of BMG Music Publishing and Sanctuary in 2007. Those gains offset a 4.8% drop (in constant currency) in recorded music revenue in 2008.

UMG’s 2008 revenue was €4.65 billion and EBITDA was €686 million, a 11.6% increase (in constant currency). Digital grew 31%. The press releases do not indicate what percent of total revenue is digital.

Those are very good numbers for UMG, all things considered. Fiscal 2009 will be more challenging as indicated by the slump in Q4 revenue. UMG’s Q3 earnings did not take such a hit from the global economic turmoil. Q3 revenue increased 1.1% at constant currency, and the company’s revenue through the first nine months of 2008 was up 3.5% at constant currency.

But UMG has set itself up for a good performance by keeping costs in check and integrating recently acquired assets. Those additions give it broader reach into not just publishing, which is more stable than recorded music, but also artist services (management) and merchandise. How those new facets to the 360-degrees model are integrated into the company will ultimately be the measure of UMG’s diversification strategy.

Posted by: Amy Sikkes