Posted on March 7, 2023 | By MusicPromoToday

Universal Music Hails Big Jump In Revenues Earning Almost $11 Billion

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Owning a variety of businesses worldwide, Universal Music Group operates in more than 60 countries and is considered the world’s leading music company. It doesn’t come as a surprise that the Dutch–American multinational music corporation has witnessed a great rise in revenue numbers.

According to UMG’s full Financial Results for the Fourth Quarter, which you can read in full here, the company has boomed with soaring revenues that nearly earned them $10.95 billion. This 21.6% increase is mainly due to streaming and the powerful performances showcased by the recorded music and publishing divisions.

According to Variety, the company’s CEO, Lucian Grainge, plans to expand efforts towards new streaming models to ensure continued growth and provide the artists with fair compensation. In January, UMG sealed a deal with Tidal and at the moment it is trying to sign new agreements with major international platforms, including Deezer and TikTok.

Grainge also suggested that “Streaming has evolved in a way that undervalues the critical contributions of many artists as well as the engagement of many fans.” He implied that the streaming economic model is outdated and requires modifications. In his annual letter to the Universal Group staff, he stated: “What’s become clear to us and to so many artists and songwriters — developing and established ones alike — is that the economic model for streaming needs to evolve.” 

As technology advances and platforms evolve, it’s not surprising that there’s also a need for business model innovation to keep pace with change… Under the current model, the critical contributions of too many artists, as well as the engagement of too many fans, are undervalued,” revealed Grainge.

The following numbers are recorded in the summary of the fourth quarter’s 2022 results:

  • “Revenue of €2,942 million increased 16.7% year-over-year, or 8.8% in constant currency, driven by growth across all segments, and noteworthy strength in Music Publishing”
  • “Recorded Music subscription revenue grew 20.6% year-over-year, or 11.4% in constant currency and streaming revenue grew 13.3% year-over-year, or 1.8% in constant currency”
  • “Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of €620 million increased 23.3% year-over-year, or 15.5% in constant currency, and Adjusted EBITDA margin expanded 1.1 percentage points to 21.1%”
  • “Top sellers included Taylor Swift, The Beatles, Drake, SEVENTEEN, and Lil Baby”

Subsequently, Lucian Grainge said: “Today’s report demonstrates that, once again, we continue to successfully manage the company for long-term growth while driving strong results in our core business—developing great artists and introducing their music to fans around the world.” 

UMG’s Chairman and CEO added:  “Our roster—which features four of the top five, and 15 of the Top 20 IFPI Global Artists of the Year—once again achieved enormous commercial and creative success in markets around the world.  We also worked to evolve and expand relationships with our existing DSP partners as well as establish new ones in fitness, health, gaming, and the metaverse, driving the industry forward through leadership, creativity, innovation, and collaboration.

The numbers don’t lie. Overall revenue was up 21.6% to around $10.95 billion for 2022. EBITDA was up 20.3% to $2.15 billion, while operating profit witnessed a 14.8% growth, reaching $1.69 billion.

Recorded music’s revenues from streaming and subscriptions increased by around 19%, earning around $5.6 billion and the publishing division’s digital revenues grew 50% to $1.05 billion. Taylor Swift, BTS, the “Encanto” soundtrack, Olivia Rodrigo, Morgan Wallen, and the Beatles, were some of the year’s top sellers.

To sum up, streaming has played a significant role in boosting the music industry. For the past couple of years, there has been a massive shift in the model and it seems like it will continue to mold for years to come, especially after the recent jump in numbers. Universal Music’s stat proves that the trend is here to stay.

We at MusicPromoToday work together with the best in the industry to provide our readers with the most up-to-date news. Head to MPT Agency Blog and check the latest developments.

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