Vivendi's New Vitality2009-09-19From San Diego to Seoul, more than 4 million people shell out an average of $15 a month to wage battle against orcs, trolls, and the undead in World of Warcraft, a megahit fantasy game that's played over the Internet. In France, cell-phone users are paying $8.70 a month to watch TV shows on their handsets. Music lovers worldwide are spending more than $300 million a year to download songs, music videos, and cell-phone ringtones. After years of false starts, it's finally happening: Customers are paying to get digital entertainment, wherever and whenever they want it. And guess who's cashing in: Vivendi Universal (V). // //
That name ring a bell? Mais oui -- it's the former French utility company that nearly collapsed after former Chief Executive Jean-Marie Messier tried to transform it into a global powerhouse in digital media. Three years after Messier's ouster, Vivendi has regained its financial health. Debt has been pared back from over $25 billion to $5 billion. Currency-adjusted first-half revenues were up 7%, to $11.4 billion, and the company is forecasting a 37% rise in profits for the full year, to $2.2 billion.
But more important, the Paris company is in pole position to capitalize on the rapid spread of digitized entertainment. Its Universal Music Group is already a pacesetter, having become the first music company to sign on with Apple Computer Inc.'s (AAPL) popular iTunes venture two years ago. Now the music group is aggressively promoting music and ringtone downloads to mobile operators worldwide as a new generation of Web-enabled handsets comes on the market. The Vivendi Universal Games unit is planning to roll out games for mobile phones, too. "A significant part of our growth for the next five years will come from these intersections" between new technologies and Vivendi's digital storehouse, says CEO Jean-Bernard Lévy, who was promoted from chief operating officer last spring, when Messier's successor, Jean-René Fourtou, became superv...