Streaming drives Universal Music’s revenues up 15.9% in 2017

Universal Music Group’s recorded music revenue grew by 15.6% in the first six months of 2017 year-on-year to €2.14 billion (A$3.2 billion) – and attributes streaming for much of the in-black posting.

Figures issued by its parent company Vivendi overnight showed that a more-than-impressive 45.1% escalation in streaming and subscription revenues more than offset the drop in download and physical sales.

Streaming revenue was €962 million ($1.4 billion) and now accounts for 44.93% of the music company’s recorded music revenues (It was 35.64% in 2016). These include music sales, streaming and licensing.

Vivendi specifically noted how the multi-year global deal struck in April “realizes its full transformational potential for artists, labels and fans” and offered it collaborations on “innovative marketing campaigns” on the platform and “unprecedented access to data.”

Physical now represents a 22.6% share in UMG’s pie-chart (26.64% last year).

Downloads make up 16.5% of total sales (20.85% last year) and merchandise and “other” was 16% (down from 16.9%).

Operating income was €311 million ($465.5 million), a 43.3% rise over the same period in 2016. EBITDA was up 36.5% to €329 million ($493.5 million).

Universal Music Publishing Group revenues were up 9.2% to €400 million ($600 million), aided by strong performance in streaming, sync and performance.

Merchandising and other revenues were up 2.2%.

According to the report, Universal Music’s best performers during the time period were new releases Drake and Kendrick Lamar and the 50th Anniversary edition of The Beatles’ Sgt. Pepper’s Lonely Hearts Club Band.

The Weeknd’s Starboy and Moana and La La Land soundtracks continued to perform.

It noted that Despacito is the most streamed song of all time with over five billion streams across all streaming platforms.

In terms of territory, North America expanded by 27.6% to €1.023 billion ($1.5 billion), Europe up 2.14% to €674 million ($1.01 billion), Asia by 21.4% to €278 million ($417 million), Latin America by 21% to €75 million ($11.2 million) while the rest of the world grew by 13.8% to €91 million ($136.4 million).

Another significant deal struck in the year was in May when a pact with China’s main digital platform Tencent (600 million users) saw its music distributed and licensed in the growing music market, promotion of its acts and the setting up of Abbey Road Studios China, based on the legendary studio in London.

Universal Music Group’s strong performance drove Vivendi’s 5% rise in revenue, but not enough for a 11% slide in profits due to the disappointing results of its pay TV arm Canal Plus which has been hit by an across-the-board shrinking of the pay-TV market in France.