MBW’s Stat Of The Week is a series in which we highlight a data point that deserves the attention of the global music industry. Stat Of the Week is supported by music data analytics firm Chartmetric.
Universal Music Group has published its financial results for the three months to the end of September.
The headline figure from the world’s largest music rights company’s Q3 results: UMG generated revenues of EUR €2.870 billion (USD $3.15bn) during the quarter across all of its divisions (including recorded music, publishing and more).
That Q3 revenue figure was up 4.9% YoY at constant currency.
UMG’s Recorded Music, Music Publishing and Merchandising and Other segments all contributed to the revenue growth in the quarter.
Amongst UMG’s other Q3 highlights was an 8.2% YoY jump in the company’s subscription streaming revenues.
Commenting on UMG’s latest quarterly results, Sir Lucian Grainge, UMG’s Chairman and CEO, said: “Even as we continue to grow revenue and Adjusted EBITDA, we are already making progress on the strategic initiatives we outlined at our recent Capital Markets Day.”
Credit: Austin Hargrave
“We are setting the stage for a new wave of streaming growth and new opportunities to UMG, its artists, songwriters and shareholders.”
Sir Lucian Grainge
He added: “We continue to advance our Artist-Centric strategy, a key pillar of our work to evolve streaming’s underlying business model, or what we call ‘Streaming 2.0’.
“Through these initiatives, we are setting the stage for a new wave of streaming growth and new opportunities to UMG, its artists, songwriters and shareholders.”
UMG noted on Thursday (October 31) that, as previously disclosed, its revenue in the third quarter of the prior year (2023) included a €53 million benefit in Music Publishing from the accrual for a catch-up payment from certain digital service providers related to the Copyright Royalty Board Phonorecords III ruling in 2023 (the “CRB Phonorecords III Accrual”).
Excluding this item, revenue grew 7% YoY at constant currency.
RECORDED MUSIC
Universal’s overall recorded music revenues for Q3 2024 (including streaming plus physical etc.) were €2.146 billion ($2.356bn) up 6.2% YoY at constant currency. (see below).
Within the Recorded Music segment, UMG’s ‘Subscription and streaming revenues’ (including ad-supported and subscription streaming revenues) grew 6.2% YoYat constant currency to €1.491 billion ($1.637bn) in Q3.
Breaking down UMG’s recorded music streaming figure for Q3 further reveals that the company’s subscription streaming revenues specifically grew 8.2% YoY at constant currency to €1.137 billion ($1.248bn) and was driven, according to UMG, “primarily by the growth in global subscribers, as well as price increases at certain platforms”.
Meanwhile, Universal’s ad-supported recorded music streaming revenue was up 0.3% YoY at constant currency to €354 million ($388.8m) in Q3, due, according to UMG, “to mixed performance at advertising-based platform partners as the digital advertising market remains volatile”.
Within Universal’s recorded music business, physical revenue decreased 0.7% YoY at constant currency to €288 million ($316.31m), “as growth in vinyl sales largely offset a difficult comparison against last year’s strong CD sales in Japan”, according to UMG.
UMG’s Top sellers for the quarter included Taylor Swift, Sabrina Carpenter, Billie Eilish, Chappell Roan and Post Malone, while top sellers in the prior-year quarter included Taylor Swift, SEVENTEEN, Morgan Wallen, Olivia Rodrigo and King & Prince.
MUSIC PUBLISHING
Meanwhile, Universal’s Music Publishing division, Universal Music Publishing Group, generated revenues of €500 million ($549.15m) in Q3 2024, up 2.2% YoY at constant currency (see below).
UMG noted again that its Music Publishing revenue in the third quarter of 2023 (the prior year)included the €53 million benefit from the CRB Phonorecords III Accrual and that excluding this item, Music Publishing revenue was up 14.7% YoY in constant currency.
Within Music Publishing, digital revenue grew 0.7% YoY at constant currency to €295 million ($324m).
Performance revenue declined 3.8% YoY at constant currency to €101 million ($111m) “as a result of lower collections in parts of Europe”, UMG said on Thursday.
Synchronisation revenue increased 18.5% YoY at constant currency to €64 million ($70.3m), driven, according to UMG, “by growth in advertising campaigns in the US and Europe”.
Mechanical revenue increased 12% YoY to €28 million ($30.75m), both as reported and in constant currency as a result of improved physical sales.
Merchandising
Universal’s ‘Merchandising and Other’ revenue in Q3 2024 reached €237 million ($260.3m), an increase of 3.5% YoYat constant currency, driven, according to UMG, “by growth in direct-to-consumer sales and higher touring merchandise sales, partially offset by lower retail sales”.
EBITDA ETC.
In Q3 2024, UMG’s EBITDA (earnings before interest, taxes, and depreciation) increased 17.8% YoY at constant currency, to €556 million ($610.65m).
EBITDA margin was 19.4%, compared to 17.4% in the third quarter of 2023 (see below).
According to UMG, EBITDA and EBITDA margin were impacted by non-cash share-based compensation expenses of €65 million during the third quarter of 2024, compared to €103 million during the third quarter of 2023.
Excluding non-cash share-based compensation expenses, Adjusted EBITDA for the quarter was €621 million ($682m), up 8.2% YoY at constant currency.
Adjusted EBITDA margin improved to 21.6% in Q3 2024, compared to 21.1% in Q3 2023.
Boyd Muir, UMG’s EVP, CFO and President of Operations, said: “Our focus remains on maximizing the long-term value of the business.
“The diversity of our revenue is not only driving attractive results in revenue and Adjusted EBITDA growth for UMG this quarter, but also positioning the company for strong continued growth in the coming years.”
The company said today that it is “immediately initiating an executive search process” to hire a new CFO.
Muir will serve as both COO and CFO until a new CFO is appointed.
All references to YoY percentages in this story, whether stated as such or not, are in constant currency. All EUR-USD conversions in this report have been made as per the average rate for the period as identified by the European Central Bank
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