Grainge’s five-year plan kickstarts with latest UMG earnings report

A 62.4% jump in streaming revenue not only ensured Universal Music Group (UMG)’s continual rise in earnings, but “more than offset the decline in both digital download and physical sales,” said its Paris-based parent Vivendi SA.

Streaming now makes up 38% of UMG revenue, up from 17% two years ago. That equates to €653 million in six months – or A$37.4 million a week, and over $5.2 million per day.

UMG’s group-wide revenues was up 1.6% to €2.32 billion ($3.4 billion). This was down 0.8% compared to the first half of 2015, but up 0.5% at constant perimeter and constant currency. Net earnings were up 3.7% to €177 million ($262 million).

Top selling albums for the group in the first six months of 2016 were by Drake, Rihanna and Ariana Grande, with carry-on sales from Justin Bieber and The Weeknd. In the United States, UMG also claimed four of the top five most-streamed records over the period (Drake, Rihanna and Justin Bieber).

Revenue for Universal Music Publishing Group was €361 million ($534.4 million), up by 4% at constant currency, for streaming, subscription and sync income rises. Stronger touring activity saw all related income, as merchandising, up 32%.

Under the chairmanship of billionaire Vincent Bollore, Vivendi itself had another strong year, even if total revenue of €5.04 billion ($7.4 billion) was a 0.9% drop, and its adjusted net income of €286 million ($23. 4 million) a 13.1% drop.

Vivendi estimates its total assets at €30.5 billion ($45.1 billion). It includes UMG, Canal+ Group, Vivendi Village, DailyMotion and Vivendi Content. Its net cash on June 30 amounted to €2.1 billion ($3.1 billion), compared to €6.4 billion ($9.4 billion) on December 31, 2015.

Earlier this year it bought mobile game maker Gameloft after selling off Activision Blizzard, makers of the popular World of Warcraft, in January 2016 for a profit of €576 million ($852.7 million).

For the first time Canal+ Group’s international subscribers were higher than those in France, 5.727 million vs. 5.455 million. This growth was mostly in Africa. In France, Canal+’s pay TV revenues declined by 3.5% to €2,639 million ($3.9 billion). As a result, Vivendi has begun a cost-cutting scheme worth €300 million ($444 million) – €60 ($88.8 million) to €80 million ($118 million) of which will be realised this year – to return to break-even by 2018.

In the coming weeks, Vivendi will launch Studio+, the first global offering of premium series for mobile devices, in partnership with several telecom operators. Studio+ will present 10 episodes of various genres at 10 minutes each created specifically for smartphones and tablets. 60 original premium series in 18 countries and six languages are in production, 25 already finished.

The rise in revenue for Universal Music Group is a positive start for CEO and ChairmaIncluded in the CEO and Chairman’s plan is to accelerate the monetising of music on digital channels.n Lucian Grainge’s five-year plan for the music company, which he launched last year when he committed himself to remain as its head until 2020.

The plan is to accelerate the monetising of music on digital channels, broaden the reach of its audio and visual content via multiple partnerships with platforms, strengthen its strategic relationships with brands and sponsors and continue investing in high-potential markets for music, such as Africa, India and China.

Universal Music Group operates in 60 countries, owns 50 labels, and employs 7,000 staff around the world.