One of the biggest surprises in the music business so far this year was the news that Universal Music Group’s digital revenues declined in 2014.
That pattern doesn’t now look likely to continue in 2015… and emphatically so.
According to new company information, Universal posted an 8% rise in digital music income in the first quarter of this year (Q1) to €459m.
That figure has been reduced by constant currency, too: because UMG is owned by Paris-based Vivendi, it reports to shareholders in Euros.
And because Euros are currently weak in exchange against the Dollar, UMG is quids in when it comes to converting its income from the world’s biggest music territory, North America, where it does 41% of its business.
As such, UMG’s overall revenues – across recorded music, publishing, merchandise and more – were up 11.6% year-on-year in Q1 to €1.1bn.
However, they were up 2.3% at constant currency and ‘perimeter’, which adjusts income from one-off acquisitions/restructuring for a fairer like-for-like comparison.
Recorded music revenues grew 2.4% at constant currency and perimeter – and 11.5% in actual terms – to €874m thanks to ‘strong new release and carryover sales’.
Best sellers in the quarter included the Fifty Shades of Grey soundtrack (pictured), plus strong carryover sales from Taylor Swift and Sam Smith and new releases from Drake, Madonna and Kendrick Lamar.
UMG said that growth in subscription and streaming revenues more than offset a decline in both digital download sales and physical sales – but didn’t indicate if streaming brought in more money than downloads, as it did at Warner in the same quarter.
Music publishing revenues (at UMPG) grew 3% at constant currency and perimeter – and a whopping 13% in actual terms – to €184m, also driven by ‘increasing subscription and streaming revenues’.
UMG’s EBITA was €82 million, up 39.3% at constant currency and perimeter (+45.6% at actual currency) compared to the first quarter of 2014.
‘The favorable performance reflected the benefit of both revenue growth and mix, as the continued transition to digital sales, improved licensing income and a lower proportion of sales from distributed repertoire all helped margins,’ Vivendi told shareholders.
UMG’s income from operations was €88 million, up 26.1% at constant currency and perimeter (+32.8% at actual currency) compared to the first quarter of 2014 after adjusting out higher restructuring and integration charges in the first quarter of 2014.
Music Business Worldwide
