Universal Music posts 12.7% leap in Q1 revenues, sues Prince estate

Universal Music Group posted revenues of €1.3 billion (A$1.91 billion) in Q1 2017, marking a 12.7% rise, up from €1.119 billion ($1.64 billion) year-on-year.

It was its best performing quarter in 15 years – the group generated €1.37 billion ($2 billion) in 2002.

Universal Music’s strongest performance came from the recorded music division. Its revenue was €1.016 billion ($1.49 billion) in the three months to March 31.

This was up 12.2% from €890 million ($1.31 billion) in the same quarter last year. Growth was primarily in North America and Latin America but flat elsewhere.

The company attributed this growth primarily to fast rising sales from subscription and streaming which soared an impressive 49%.

However that streaming’s growth was in contrast 59.7% in Q1 2016 should be of concern to its executives.

As per the trend, downloads were down 21% to €155 million ($22.8 million) and physical revenues dropped 5.6% to €226 million ($332.8 million).

Universal Music cited Drake, The Weeknd and the La La Land, Fifty Shades Darker and Moana soundtracks as main sellers.

It expects strong sales from upcoming releases from The Beatles (the 50th-anniversary deluxe version of Sgt. Pepper’s Lonely Hearts Club Band), Benjamin Biolay, Lorde, Lana Del Rey, Feist, Imagine Dragons, Shania Twain, Katy Perry, Pearl Jam and Chris Stapleton.

Digital and sync success stories led to the publishing division rising 14% to €220 million ($324 million) from €180 million ($265.1 million).

Merchandising and “other” revenues were up 13.3% from €47 million ($69.2 million) to €54 million ($79.5 million).

Also overnight, Universal Music has filed a lawsuit against Prince’s estate, demanding the cancellation of its US$31 million (A$42 million) licensing deal and its money returned.

It accuses the estate’s former entertainment advisor L. Londell McMillan of “fraudulent inducement” in the deal.

The deal was to include all of Prince’s post-1996 material released through his NPG Records and unissued material. In America Universal was also to get some of his albums from his golden Warner Bros period covering 1979 to 1996.

Universal had allegedly been told by Prince’s estate that it could start releasing the Warner Bros material as early as 2018. But it looks as though these won’t be available until 2021.

In yet more court action, Prince’s sister and five half-siblings have requested the court expedite its decision as to which of them will be allowed access to $200 million ($271 million) of his estate.