Australian digital media company Destra Corporation plans to shed its entertainment division, Destra Entertainment, during the 2008/9 financial year.
"The entertainment division has been adversely impacted by the current retail environment and a disappointing performance from the theatrical release films business," the company said in a statement filed with the Australian stock exchange (ASX). "In addition, the global structural decline in the CD market and maturing DVD market, both of which have negatively impacted the company, have not yet been offset by growth in the corresponding digital businesses."
Destra Entertainment incorporates Destra Media which includes record labels Rajon Music (various genres), Central Station Records (dance), Compass Records (country) and MRA Entertainment (world/adult contemporary); Destra Vision, which distributes children and documentary video and DVD titles; and budget audio and video content publisher and distribution company Payless Entertainment.
Destra has approached a number of major labels about buying the division. A source at Destra tells Bilboard.biz, "We're not the only ones in this boat. A number of other Australian indie labels are also looking to sell."
Set up in 2003 by Domenic Carosa, Destra Corporation was one of the success stories of the digital era down under. In the last three years, it went on a spending spree, setting up a series of online community sites and media entertainment distributor networks.
But in March this year, losses in the Australian stock market left Destra vulnerable. On April 21, regional TV operator Prime Media Group increased its stake in Destra from 19.6% to 43.96%. Twenty four hours later, it had ousted Carosa and set up an interim board.
In June, the new board informed the Australian stock exchange its estimate of earnings for the 2007/08 financial year was $2.5 million Australian ($2.2 million) and $3 million Australian ($2.6 million).