Credit: Beth GarrabrantUMG's top sellers for the quarter included releases from Taylor Swift, Noah Kahan, Morgan Wallen, Ariana Grande and Olivia Rodrigo
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.
This morning (May 2), UMG and ByteDance-owned social video platform TikTok issued a joint statement confirming that they have inked a new deal that includes “improved remuneration” for UMG’s artists and songwriters.
The news brings to an end the licensing dispute between the two companies that’s been ongoing since the end of January and means that Universal’s catalog of songs and recordings will be returning to TikTok over the next two weeks.
UMG Chairman/CEO, Sir Lucian Graingeconfirmed in an internal memo to Universal employees this morning, and obtained by MBW, that “greater compensation” is coming from TikTok for UMG artists and songwriters via the new deal.
The news arrived several hours before another important update from Universal Music Group – the company’s Q1 2024 financial results.
The headline stat from UMG’s Q1 results (for the three months to end of March): The company generated revenues of EUR €2.594 billion (USD $2.816bn) across all of its divisions (including recorded music, publishing and more).
That Q1 revenue figure was up 7.9% YoY at constant currency, driven, according to UMG, “by solid growth in all segments”.
RECORDED MUSIC
Universal’s overall recorded music revenues for Q1 2024 (including streaming plus physical etc.) were €1.989 billion ($2.159bn), up 5.6% 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 12% YoY at constant currency to €1.466 billion ($1.59bn).
Breaking UMG’s recorded music streaming figure down further reveals that the company’s subscription streaming revenues specifically grew 12.5%YoY at constant currency to €1.123 billion($1.219bn).
Universal’s ad-supported recorded music streaming revenue, meanwhile, grew 10.3% YoY at constant currency to €343 million ($372.42m) “as the advertising industry continued to recover,” according to UMG.
Within Universal’s recorded music business, physical revenues decreased 14.4% YoYat constant currency to €255 million ($276.87m), “largely due to a very difficult year-over-year comparison, particularly in Japan,” said UMG on Thursday (May 2).
Elsewhere in UMG’s recorded music segment, ‘License and other revenue’ declined 0.4% YoYat constant currency to €222 million ($241.04m), “due to a timing-related decline in synchronization revenue” according to UMG.
Top sellers for the quarter included releases from Taylor Swift, Noah Kahan, Morgan Wallen, Ariana Grande and Olivia Rodrigo, while top sellers in the prior-year quarter included releases from King & Prince, Morgan Wallen, Taylor Swift, TOMORROW X TOGETHER and back number.
MUSIC PUBLISHING
Elsewhere, Universal’s Music Publishing division,Universal Music Publishing Group, generated revenues of €496 million ($538.55m) in Q1, up 18.4% YoY at constant currency.
Within Music Publishing, digital revenue reached €284 million ($308.36m), up 24.6% YoY at constant currency, driven by “continued growth in streaming and subscription revenue,” according to UMG.
Synchronization revenue declined 7.5% YoY at constant currency to €62 million ($67.31m) “as a result of timing,” according to the company’s filing.
Mechanical revenue, meanwhile, grew by8.7% YoY in both reported and constant currency to €25 million ($27.15m), while performance revenue increased 28.1% YoY at constant currency to €114 million ($123.78m), “due in part to higher society payments in the US, as well as greater than anticipated live activity in Europe”.
Merchandising and Other
Merchandising and Other revenue in the first quarter of 2024 reached €114 million ($123.78m), an increase of 7.5% YoY at constant currency.
According to UMG, this growth was driven by “increased touring merchandise sales, partly offset by a decrease in direct-to-consumer and retail sales due to a difficult comparison”.
EBITDA ETC.
In Q1 2024, UMG’s EBITDA (earnings before interest, taxes, and depreciation) grew 95.2% YoY at constant currency to €490 million ($532m).
EBITDA margin was 18.9%, compared to 10.6% in the first quarter of 2023.
Adjusted EBITDA for Q1 was €591 million ($641.7m), up 15.9% YoY at constant currency.
Adjusted EBITDA margin expanded 1.5 percentage points to 22.8% in Q1 2024 vs. 21.3% in Q1 2023.
“UMG’s continuing success is in large measure attributable to the fact that we always put artists at the center of everything we do and surround them with the industry’s most experienced teams and our broad-based and strategically integrated portfolio of businesses,” said UMG’s Chairman and CEO Sir Lucian Grainge.
The Photo Access/Alamy
“Our strategic plan is once again driving a strong start to the year, reflected in our results, as well as the exceptional performance of our artists around the world.”
He added: “Our strategic plan is once again driving a strong start to the year, reflected in our results, as well as the exceptional performance of our artists around the world.”
“We remain encouraged by the trajectory of the business and with the execution of our plans for this year and the years ahead.”
Boyd Muir, UMG
Boyd Muir, UMG’s EVP, CFO and President of Operations said, “2024 is off to a healthy start, with revenue growth in all segments as well as strong Adjusted EBITDA growth and margin expansion.
“We remain encouraged by the trajectory of the business and with the execution of our plans for this year and the years ahead.”
All EUR-USD conversions in this report for Q1 2024 have been made as the average prevailing quarterly rate as identified by the European Central Bank.Music Business Worldwide
Chartmetric is the all-in-one platform for artists and music industry professionals, providing comprehensive streaming, social, and audience data for everyone to create successful careers in music.Music Business Worldwide
