Just weeks after it was reported that Sony Music Entertainment was to acquire the recording and publishing rights to Queen’s music for GBP £1 billion (USD $1.27 billion), new earnings numbers from the band give us a clue as to why the catalog may have fetched that record-breaking price.
The latest annual report from Queen Productions Ltd – the UK-based company that collects the band’s turnover, including recording and sync royalties, and performance income – have now been issued and reviewed by MBW.
The company reported GBP £39.47 million in revenue for the fiscal year ended September 30, 2023. At the average exchange rate for 2023, that’s equal to USD $49.1 million.
That represents a small YoY revenue decline of 3.5% from the £40.89 million ($50.41 million) that the company reported for the 2022 fiscal year, according to the financial report filed with the UK’s Companies House.
Of the £39.47 million in revenues for FY 2023, royalties accounted for £36.1 million, down 2.0% YoY from fiscal 2022.
However, year-over-year comparisons of royalty earnings may not accurately reflect the consumption of Queen’s music because, among other things, Queen Productions Ltd. doesn’t adjust its numbers for fluctuations in exchange rates.
While the company reports turnover in British pounds, a large share of its revenue comes from outside the UK.
In fact, Spotify data suggests that the number of Queen streams has been rising for the past few years.
As of June 2024, Queen was the 43rd most-streamed act on Spotify, up from 49th place a year earlier and 44th place two years earlier. The band had 52.61 million monthly listeners, up from 48.45 million listeners a year earlier, and 40.3 million two years earlier.
Queen Productions said the drop in turnover in FY2023 was “partly attributable to a decline in license fees on live music touring”. There was also a YoY decrease in royalties from the Bohemian Rhapsody biopic, which came out in late 2018, and We Will Rock You, the musical by Queen and Ben Elton, which toured across the UK in 2022 and wrapped up in 2023.
However, Queen Productions noted that income from live performances increased during FY2023, offsetting some of the decline in other parts of the business.
“Licensing fees on live music touring is expected to increase in the following year leading to an anticipation the company will generate similar income in [fiscal 2024] and in the years thereafter,” the earnings report stated.
The company reported a profit before tax of £19.65 million for fiscal 2023, down 11.3% YoY. The net profit margin fell from 54% in fiscal 2022 to 50% in fiscal 2023.
Queen Productions is owned in equal parts by the three living members of Queen – John Deacon, Brian May, and Roger Taylor – as well as the estate of Freddie Mercury.
Dividends paid out to the company’s four shareholders were considerably higher in 2023 than the year before. In all, Queen Productions paid out £19.65 million to the four shareholders, up from £12.19 million paid out in fiscal 2022.
As of last year, Queen Productions owned the band’s master recordings outside the US and Canada, where they are owned by Disney, and licensed them worldwide to Universal Music Group as its distributor and record company partner.
The band’s publishing rights were owned by another company, Queen Music Ltd, and were administered by Sony Music Publishing. Queen Music’s past financial statements suggested that its income was being paid through to Queen Productions.
“Licensing fees on live music touring is expected to increase in the following year leading to an anticipation the company will generate similar income in [fiscal 2024] and in the years thereafter.”
Queen Productions Ltd
Of course, this whole arrangement is about to change, if last month’s news that Sony has bought the rights to Queen’s catalog is correct. (Sony has yet to officially confirm the acquisition.)
According to a report at Hits, Sony will go from being the administrator of Queen’s publishing catalog outside North America to owning the publishing and recording rights worldwide.
Sony will collect the royalties that Disney has been paying to Queen since it bought the North American recording rights in 1990, and Sony will also become the worldwide distributor of Queen when the band’s licensing deal with Universal expires in 2026 or 2027, Hits reported.
The Sony acquisition also reportedly includes name and likeness rights – meaning we could see Freddie Mercury’s face in new and unexpected places in the years to come.Music Business Worldwide