Thursday, February 13, 2020

Universal Music Group is now an $8bn-a-year company, as streaming revenues surge 21.5% in record 2019 | Music Business Worldwide

MBW usually enjoys writing Universal Music Group’s quarterly financial results.

As the biggest recorded music company in the streaming age, the impressive amount of dollar pulled in by UMG often serves up some sizzling headlines. Today, for example, we could have gone with Universal is now generating over $11m every day from streaming. It would have been fun, and true (the firm generated €921m, or $1.02bn, in recorded music streaming revenues in Q4, according to parent Vivendi’s new financials, published today.)

But, right now, any news about Universal is bound to be over-shadowed by a much bigger headline: that, in addition to the 10% of the company being acquired by a Tencent-led consortium for over $3bn, UMG parent Vivendi has now announced plans to spin out a further portion of its music firm onto the stock market within the next three years.

Everything else we can write about Universal’s fiscal situation probably seems pretty academic after that IPO bombshell, right?

But here we are. Let’s have a crack anyway.

Universal Music Group saw its overall revenues in 2019 – across recorded music, publishing and other activities – hit €7.16bn ($8.04bn).

A record annual figure for the company under Vivendi ownership, that revenue number was up 14.0% year-on-year at constant currency.

Company EBITA was €1.12bn ($1.26bn) in the year, up 22.3%, representing a 15.7% EBITA profit margin.

Total recorded music revenues at Universal last year hit €5.63bn ($6.33bn), up 11.6%.

Within this, recorded music streaming revenues leapt up by 21.5% in calendar 2019 to €3.33bn ($3.73bn).

This means that streaming contributed some 59.1% of UMG’s total recorded music revenues in 2019.

Good news for retailers: UMG’s physical recorded music revenues grew in 2019, up 3.1% year-on-year to €1.01bn ($1.14bn).

(All percentages shown above are at constant currency.)

Universal’s biggest revenue-generating recorded music artists/projects, globally and in order, across 2019 were: (i) Billie Eilish (pictured); (ii) Post Malone; (iii) Taylor Swift; (iv) Ariana Grande; (v) A Star Is Born OST.

Looking specifically at music publishing, Universal Music Publishing Group, led by Chairman and CEO Jody Gerson, continued its rise, with annual revenues now comfortably in excess of $1bn at €1.05bn ($1.18bn).

That UMPG revenue number was up 9.2% year-on-year at constant currency.

(All Euro to USD conversions made at annual rate as confirmed by Vivendi.)Music Business Worldwide


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