UMG Revenue Grows 10% To $7.1 Billion, Streaming Up 35%
Universal Music Group revenue grew 10% last year driven by 35.4% growth in streaming revenue and new licencing deals that offset declines in download and physical goods sales. The news came as part of a positive financial report from parent corporation Vivendi. The highlights:
- Universal Music Group’s (UMG) revenues totaled $7.1 billion (€5.673 billion) last year, up 10.0% at constant currency and perimeter compared to 2016 (+7.7% on an actual basis).
- Recorded music revenues grew by 11.3% at constant currency and perimeter as growth in subscription and streaming revenues (+35.4%) more than offset the decline in both download and physical sales.
- Music publishing revenues grew by 9.6% at constant currency and perimeter, also driven by increased subscription and streaming revenues, as well as growth in synchronization and performance revenues.
- Merchandising and other revenues were down 7.1% at constant currency and perimeter, due to lower touring activity.
- Recorded music best sellers for the year included new releases from Taylor Swift, Kendrick Lamar and Drake, carryover sales from The Weeknd, the Despacito single from Luis Fonsi and the 50th Anniversary edition of Sgt. Pepper’s Lonely Hearts Club Band by the Beatles, as well as soundtrack releases from the movies Moana and La La Land.
- Income from operations amounted to €798 million, up 18.5% at constant currency and perimeter compared to 2016 (+16.2% on an actual basis) as a result of higher revenues.
- EBITA amounted to €761 million, up 20.6% at constant currency and perimeter compared to 2016 (+18.3% on an actual basis) as a result of higher revenues and lower restructuring charges. 2016 EBITA included legal settlement income.
UMG entered into a number of major agreements in 2017. After announcing a landmark deal with Tencent in May 2017, and re-setting its relationship with Spotify in April 2017 and YouTube in December 2017, UMG entered into a deal with Facebook, also in December 2017. This deal, for the first time forged a true commercial partnership between a major music company and the world’s largest social platform. In conjunction with UMG’s existing partnerships with Amazon and Apple, UMG is fostering an increasingly competitive and dynamic market for music among the biggest tech platforms and music services in the world.
In 2018, UMG believes that it will find more profits from overall growth of the music, market particularly as a result of the development of subscription and streaming services.