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UMG’s Lucian Grainge acknowledged „economic uncertainty in the world,“ but called music a „shelter from the storm,“ referencing Bob Dylan.
By Ethan Millman
Music Editor
Universal Music Group, the world’s largest music company, posted 11.8 percent year-over-year revenue growth for its first quarter to 2.9 billion euros ($3.3 billion), the company reported on Tuesday, buoyed by releases from Kendrick Lamar, Sabrina Carpenter, Lady Gaga and Japanese rock band Mrs. Green Apple.
Revenue from UMG’s recordings division overall grew 12.7 percent year over year to about 2.2 billion euros ($2.5 billion), with subscription and streaming revenue growing 9.5 percent to about 1.6 billion euros ($1.8 billion). Subscriptions specifically grew 11.5 percent, but streaming grew 3 percent. Revenue from physical sales meanwhile grew 17.6 percent to 300 million euros ($341 million). Licensing revenue grew the most at 33 percent to 296 million euros ($338 million).
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On the publishing side, revenue grew nearly 12 percent overall, up to about 555 million euros ($633 million). Digital revenue was by far the biggest gainer, and the largest contributor to the publishing division, growing 19.4 percent to 339 million euros ($387 million). Performance revenue growth was flat at 114 million euros ($130 million). Download revenue dropped 13 percent to 40 million euros ($46 million), matching broader industry trends as digital downloads continue to plummet in the streaming era.
Merchandise revenue fell nearly 2 percent to 112 million euros ($128 million), with the company citing “timing-related declines in touring merchandise sales” but adding that stronger direct-to-consumer sales partially offset the loss.
“Our strong results – and our confidence about the future – reflect the execution of our strategic plan, including consistently developing and breaking the world’s most successful artists and songwriters by connecting them with billions of fans in new and innovative ways,” UMG’s chairman and CEO Lucian Grainge said in a statement.
This was the first financial quarter earnings report since UMG announced its new multi-year partnership with Spotify in January. The company also restructured its Nashville team, replacing CEO Cindy Mabe with Mike Harris. (UMG Nashville rebranded to Music Corporation of America this month). UMG flagship label also announced it was reviving the famed Nashville label Lost Highway.
During UMG’s earnings call Friday morning, UMG spoke about “superfan” offerings like super-premium streaming plans on DSPs. Grainge also referenced the current broader “economic uncertainty in the world,” but referred to music as a “shelter from the storm,” quoting Bob Dylan as Grainge said he was confident in UMG’s business in the months ahead.
“I’ve been through various cycles of economic uncertainty, music has always proven to be incredibly resilient,” Grainge said. “It’s low-cost, high engagement and obviously a unique form of entertainment. When household budgets tighten, music subscriptions and purchases have been resilient. The usage is constant, and it’s good value for money. Music improves people’s lives.”
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