Universal Music Group announced higher first-quarter earnings and revenue on Tuesday as its business grew, including an unprecedented music unit that benefited Charm Soundtrack as well as releases such as The Weeknd and Japanese idol group King & Prince.
In the fall, French telecoms and media conglomerate Vivendi fired majority owner, chairman and CEO of music Lucian Grange in cash to pay the music industry thanks to a boom in streaming revenue. Vivendi said it will own about 10 percent of the company for at least two years.
Grange spoke on the analyst call about UMG’s portfolio approach to investments made throughout the artist’s career as they evolve and diversify into alternative income streams. “These many different revenue streams, each with their own unique characteristics, are crucial to our success. “For many years, we have built UMG and our strategic roadmap to generate repeatable and stable revenue,” he told investors.
Grange argued that putting all your eggs in one basket leaves the business vulnerable, as when online piracy undermined the film industry with its reliance on digital video discs and the music industry on compact discs. He added that UMP has diversified in terms of artists and songwriters, geographically how it does business globally, and in terms of product as it increasingly targets emerging games and meta-versions as emerging markets.
Asked by Netflix if it had recently announced that it was losing subscribers as a possible sign that the streaming market was saturated and perhaps reaching the peak of consumer confidence, Grange argued that video-on-demand subscription services and music subscription services are very different businesses.
He argued that SVOD focuses on original content that users typically only watch once, causing constant delays on video streaming platforms. But when subscribing to music, users don’t jump from one platform to another and consume the music they love for a lifetime.
“In music you keep your favorites, you have constant access. “We firmly believe that (music) will continue to grow in the music library and playlists,” Grange told analysts.
For UMG, first-quarter earnings on interest, taxes, depreciation and amortization (EBITDA), the key profitability metric, rose 14.9%, or 14.1% straight, to €454 million ($478 million) .
Quarterly revenue increased by 21.6% to €2.2 billion (US$2.32 billion), or 16.5% when assuming a constant exchange rate. Recorded music, music editing and merchandising and other segments of the company contributed to the improvement.
In the first quarter, revenue from UMG’s recorded music unit increased 16%, or 11.3%, in fixed currency to $1.72 billion ($1.81 billion), as fixed-price revenue subscription and currency streaming increased by 14.6%. 8.7 percent. But downloads and other digital revenue dropped 20.0% “as download sales continue to decline across the industry,” the company said.
Best-selling quarter includes Disney launches Charm The soundtrack, King & Prince, The Weeknd, Fujii Kaze and Ado, “while King & Prince, Morgan Wallen, The Weeknd, Justin Bieber and Ariana Grande were top sellers in the previous quarter,” the company said in a statement.
Music publishing revenue for the first quarter was €375 million ($395 million), an increase of 38.4%, or 32.5%, in fixed currency terms. The secondary results were new accounting policies “with certain revenues raised through communities” as well as “organic growth trends and initial contributions from catalog purchases in previous years”.
In February, UMG launched a deal to buy an entire catalog of Sting’s songs, including rock classics from the Police frontman like “Roxanne,” “Every Breath You Take” and “Message in a Bottle.” Financial terms were not disclosed.
Commercial and other income increased sharply in the first quarter, jumping 81.4%, or 69.8%, to $107 million ($113 million) in fixed currency, as tour-related commercial revenue increased after the slowdown in live touring. “- said Universal Music.
Source: Hollywood Reporter
Benjamin Smith is a fashion journalist and author at Gossipify, known for his coverage of the latest fashion trends and industry insights. He writes about clothing, shoes, accessories, and runway shows, providing in-depth analysis and unique perspectives. He’s respected for his ability to spot emerging designers and trends, and for providing practical fashion advice to readers.
