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Tuesday, April 16, 2024

Universal generated $2.6bn in Q1, as subscription streaming revenues jumped over 10% YoY

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Common Music Group printed its Q1 2023 monetary outcomes on Wednesday (April 26), for the three months to finish of March.

The headline determine from the outcomes: The corporate generated Q1 revenues of EUR €2.451 billion (USD $2.62bn) throughout all of its divisions (together with recorded music, publishing and extra).

That Q1 income determine was up 9.3% YoY at fixed forex, pushed by development in Recorded Music and Music Publishing.

As you’ll learn in our evaluation beneath, highlights in UMG’s Q1 included a 10.3% leap within the firm’s subscription streaming revenues, and robust bodily gross sales on the planet’s second-largest recorded music market, Japan.


Common’s total recorded music revenues for Q1 2023 (together with streaming plus bodily and so forth.) had been €1.923  billion ($2.06bn), up 9.6% YoY at fixed forex (see beneath).

Inside the Recorded Music section, UMG’s ‘Subscription and streaming revenues’ (together with ad-supported and subscription streaming revenues) grew 7.1% YoY at fixed forex to €1.329 billion ($1.42bn).

Breaking UMG’s recorded music streaming determine down additional reveals that the corporate’s subscription streaming revenues particularly grew 10.3% YoY at fixed forex to €1.014 billion ($1.08bn).

It’s price noting that two outstanding music streaming providers, Apple Music and Amazon Music, raised the costs of their flagship particular person premium providers within the second half of 2022, which might doubtless have had a constructive influence on world recorded music revenues in Q1 2023, versus Q1 2022.

UMG doesn’t level to this as being an element, nevertheless, stating that its subscription streaming income lead to Q1 was pushed, “primarily by the expansion in world subscribers”.

This reality was evidenced by Spotify’s outcomes, printed yesterday (April 25), which revealed that its personal Premium Subscriber base grew 15% YoY, to succeed in 210 million complete paying customers – 3 million above the corporate’s steerage for the quarter.

Common’s ad-supported recorded music streaming income, in the meantime, was down 2.2% YoY at fixed forex (see above) to €315 million ($337.99m). UMG mentioned that “the promoting business continued to be impacted by a tough financial surroundings”.

Inside Common’s recorded music enterprise, bodily revenues grew 32.6% YoY at fixed forex to €313 million ($335.84m).

UMG says that this development was pushed “by sturdy CD and DVD gross sales in Japan and enhancements in vinyl gross sales”.

As highlighted by UMG Chairman and CEO Sir Lucian Grainge on the corporate’s name with analysts on Wednesday (April 26), Japanese pop stars King & Prince, one in every of UMG’s high sellers within the quarter, bought over 1 million CD copies of their single Life Goes On in its first week. Grainge famous that was “the primary time in three years that gross sales threshold was crossed”.

Elsewhere in UMG’s recorded Music section, ‘License and different income’ grew 8.1% YoY at fixed forex to €226 million ($242.49m).

Along with King & Prince, high sellers for the quarter included releases from Morgan Wallen, Taylor Swift, TOMORROW X TOGETHER and again quantity.

UMG’s revenues generated by ‘merchandising and different’ income in Q1 2023 was €107 million ($114.81m), which was down 3.6% at fixed forex.

Common says that this lower was “on account of a tough comparability on touring merchandise gross sales towards final yr’s pent-up demand for touring following a post-Covid reopening, in addition to a decline in retail gross sales, offset by a rise in direct-to-consumer gross sales”.

Discussing the outcomes on the corporate’s earnings name, Boyd Muir, EVP, CFO and President of Operations for UMG, famous that this consequence was “partially offset by sturdy gross sales in [UMG’s] direct to client gross sales”.

Afterward the decision, Muir pointed to elements impacting merch revenues together with touring schedules, and famous that Q1 “is the quietest quarter for touring”.

He added: “If you happen to take a look at this with with enough long run lens, we undoubtedly see development for a substantial future for our merchandising enterprise”.

Music Publishing

Elsewhere, Common’s Music Publishing division, Common Music Publishing Group, generated revenues of €425 million ($456.02m) in Q1 2023.

That was up 11.5% YoY at fixed forex.

Inside Music Publishing, digital income grew 19.1% YoY at fixed forex to €231 million ($247.86m), pushed, in line with UMG, “by continued development in streaming & subscription”.

Synchronisation income grew 7.8% YoY at fixed forex to €69 million ($74.03m), due “to continued development in synchronization alternatives for music”, in line with UMG.

Mechanical income was flat YoY at fixed forex, at €23 million ($24.67m).

“Our sturdy begin to the yr demonstrates our consistency in creating nice artists and introducing their music to followers world wide.”

Sir Lucian Grainge, UMG

“Our sturdy begin to the yr demonstrates our consistency in creating nice artists and introducing their music to followers world wide,” mentioned Sir Lucian Grainge, UMG’s Chairman and CEO.

“We look ahead to constructing on this momentum and furthering our observe file of reworking disruptive applied sciences into alternatives to speed up our enterprise for our artists, followers and shareholders.”


In Q1 2023, UMG’s EBITDA (earnings earlier than curiosity, taxes, and depreciation) fell 43.4% YoY at fixed forex, to €261 million ($280.05m).

EBITDA margin was 10.6%, in comparison with 20.6% within the first quarter of 2022 (see beneath).

In line with UMG,  “this decline was pushed by non-cash share-based compensation bills of €261 million ($280.05m) throughout the first quarter of 2023, in comparison with €1 million ($1.121m) of non-cash share-based compensation bills throughout the first quarter of 2022″, after the corporate rolled out its first world fairness compensation plan, which started in This fall 2022.

Excluding non-cash share-based compensation bills, UMG reviews that its Adjusted EBITDA for Q1 was €522 million ($560.1m), up 13% in fixed forex and that its Adjusted EBITDA margin expanded 0.6 share factors to 21.3%, in comparison with 20.7% within the first quarter of 2022, because of income development, working leverage and money compensation financial savings of €9 million related to the fairness plan rollout.

“With income up 9% and Adjusted EBITDA up 13%, we’re inspired by our first quarter and stay on observe to fulfill our plans for the yr.”

Boyd Muir, UMG

Boyd Muir, EVP, CFO and President of Operations for UMG added: “Our outcomes replicate the continued evolution of our enterprise in direction of constant and predictable income from a rising array of sources.

Boyd Muir, EVP, CFO and President of Operations for UMG added: “Our outcomes replicate the continued evolution of our enterprise in direction of constant and predictable income from a rising array of sources.

All EUR-USD conversions on this report for Q1 2023 have been made as the common prevailing quarterly price as recognized by the European Central Financial institution.Music Enterprise Worldwide


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