Vivendi chief says music industry gloom overdone

By Kate Holton

CANNES, France (Reuters) - Vivendi Chief Executive Jean-Bernard Levy has no plans to spin off the music unit Universal and he said on Saturday he believed the gloom surrounding the industry had been over done.

Speaking at the annual Midem conference, Levy said the music industry was going through a huge transition at the moment, with new business models for mobile and Internet services appearing all the time.

But he predicted there would still be a viable market for physical products like CDs for many years to come and he said the industry's future lay, as always, in spotting the right creative talent.

"I think altogether today there is an exaggeration in the industry," he told the conference.

"Of course it is not doing that well, but look at us, we have flat revenues, a good two digit margins and it's not as dark as what many people describe."

The music industry has been hit in recent years by Internet piracy and the rapid growth in digital sales but the planned job losses at British company EMI have highlighted the issue even further.

Levy joked that Universal could benefit from its rivals' problems, by gaining more staff or bands, but he said that ultimately a stronger competitor would benefit the whole industry.

"We like to have strong competitors," he said. "I hope that after the shake up (at EMI) there will be a strong set of major companies that will help the music industry to grow."