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News February 15, 2019

Report: Universal Music Group revenue hit a whopping €6b in 2018

Staff Writer
Report: Universal Music Group revenue hit a whopping €6b in 2018

Figures released overnight by Universal Music Group’s parent Vivendi revealed that revenue from the major label’s recording, publishing, merchandise and other divisions hit €6.023 billion (A$9.57 billion) in 2018.

This was up 10% year-on-year on a constant currency basis.

The report stated, “Globally, UMG had every one of the top five tracks, the top four artists and the top three albums on Spotify in 2018.

“Additionally, UMG artists occupied the top five positions and 14 of the top 20 positions on Apple Music’s Global Top 100 Songs 2018.”

UMG’s growing profitability was indicated by its 2018 EBITA (earnings before interest, taxes, and amortization) at €902 million ($1.43 billion), up 22.1% year-on-year at constant currency.

Recorded music revenues rose by 9.8% at constant currency to reach €4.828 billion ($7.6 billion).

This was fuelled by a 37.3% leap by surging subscription and streaming revenues to €2.596 billion ($4.11 billion).

Streaming now accounts for 54% of recorded music revenue, compared to 43% in 2017.

“UMG is pursuing its dynamic growth largely driven by the streaming boom,” affirmed Vivendi chairman and CEO, Arnaud de Puyfontaine.

Streaming more than offset the continued decline of downloads, down 23.5% to €479 million ($761.5 million), and physical sales down 16.1% to €948 million ($1.5 billion).

Bestsellers for the year included releases from Drake, Post Malone, The Beatles and Xxxtentacion, as well as the A Star Is Born soundtrack.

Led by Jody Gerson, the Universal Music Publishing Group broke the US$1 billion milestone for the first time.

This was attributed by Vivendi to “increased subscription and streaming revenues, as well as higher revenues generated from performance rights and synchronization.”

Publishing made up 15.6% of UMG’s revenue.

Merchandising and other revenues decreased by 1.5% at constant currency, as a result of lower touring activity.

During 2018, UMG signed, or resigned, superstars Taylor Swift, The Rolling Stones and Elton John.

The strong performance led Vivendi to reveal that its plans to sell 50% of Universal Music were “right on track”, according to de Puyfontaine.

It has reorganised a corporate structure, held meetings with banks and expects to select financial advisors in the next few weeks to identify and negotiate with one or two partners.

A floor price will be determined shortly.

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