UMG Reports Mixed Q2 Earnings: Streaming Growth Outshines Underperformance in Other Areas

Universal Music Group (UMG) has reported strong streaming and publishing growth in its second quarter earnings results, despite some underperformance in other areas of the business. The music giant’s total revenue reached 2.98 billion euros ($3.38 billion), up 4.5% in constant currency, but only growing 1.6% as reported due to foreign exchange losses.

Streaming growth hit UMG’s target, with an impressive subscription growth rate of 8.5%. This is a significant increase over the same period last year and demonstrates the company’s continued success in the rapidly evolving music streaming landscape. The results also indicate that the shift towards digital revenue continues, with digital income accounting for around 70% of total recorded music revenue.

UMG has been working to develop a new tier of premium content aimed at superfans, who generate a significant portion of their earnings from subscriptions and merchandise sales. While these tiers are not yet available, internal research suggests that a staggering 20% of subscribers would be willing to upgrade to such a tier, which highlights the potential for further revenue growth in this area.

The company’s publishing division also demonstrated impressive results, with digital revenue surging by 16.2%. This significant increase highlights the growing importance of streaming income and underscores the company’s commitment to supporting independent labels through its acquisition of Downtown Music Holdings, which it is confident will receive a green light from European Commission regulators before the end of the year.

The data also reveals that some areas of UMG’s business did not perform as well. The physical music segment saw a decline in revenue, and merchandise sales failed to meet expectations.

Source: www.billboard.com