Bertelsmann’s (FRA: BTG4) Napster settlements with four music publishers — which are thought to have amounted to some $400 million — have resulted in the German media group reporting a first-half net loss of 51 million euros ($69.4 million), compared to a profit of 258 million euros ($351.2 million) a year earlier; it settled the final case this week. The company also said sales declined by two percent to 8.96 billion euros ($12.21 billion); it sold its BMG Music publishing division last year.
— Some of the more high-profile core divisions of the company saw declines in sales: as expected, sales in the BMG music division saw the biggest declines in keeping with the overall decline in the music business, to 632 million euros ($860.4 million) from 888 million euros ($1.2 billion). Revenues at the Random House publishing division declined to 832 million euros ($1.1 billion) from 859 million euros the year before.
— The RTL television group fared better, reporting revenues of 2,891 million euros compared to 2,854 million ($3.9 billion) ; the clearing-house-to-mobile-content division Arvato saw an increase in its revenues to 2,243 million euros ($3 billion) from 2,202 million euros.
— The company said operating profit (EBIT) grew by 1.9 percent compared with the first six months of 2006, to 714 million euros ($972 million). Financial debt has been reduced to around 6.6 billion euros ($8.9 billion). From Reuters, CFO Thomas Rabe: “We will come very close to meeting our internal debt targets again by the end of 2007,” he added.
D2C group reorganized: In a separate announcement, Bertelsmann said it is splitting its Direct Group activities into two, one concentrating on Europe and Asia, and the other on the U.S. market. The company hopes this will help it better focus on new growth opportunities in emerging markets in eastern Europe and Asia — currently it operates in some 23 countries. The Direct Group is responsible for all the company’s direct-to-consumer activities encompassing its music, DVD and book clubs. In the U.S. it’s the largest direct marketer of these products, owning the Book-of-the-Month Club and the most recently acquired Columbia House among others. Fernando Carro will be CEO of Direct Group operations in Europe and Asia, while Stuart Goldfarb will continue to head up the North American division, now called Bertelsmann Direct North America. Goldfarb will report to Peter Olson, the chairman and CEO of Random House. The division saw a decline in revenues in the first half of this year, 1,235 million euros compared to 1,264 million euros the year previously.
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