Universal Music Group generated $2.7 billion in Q2; recorded music subscription streaming revenue grew 7.0% YoY

In recent years, the music copyright business has become familiar with major music companies posting double-digit YoY revenue growth from online subscriptions every quarter.

Yesterday (July 27), that story changed somewhat, like Universal Music GroupThe world’s largest music rights company, has announced its financial results for the second quarter of 2022 (covering the three months to the end of June).

First, the positive headline: The company’s total revenue at UMG (across music, publishing, and other activities) has grown in a healthy way 17.3% YoY in currencies unchanged during the quarter.

UMG’s quarterly key numbers for Q2 are as follows:

• As mentioned, UMG’s total company-wide revenue has increased 17.3% YoY with constant currency to EUR 2,535 billion euros ($2.70 billion);
• Total of UMG Be recorded Music sales increase 9.0% year on year with constant currency to 1.922 billion euros ($2.05 billion). Add ‘goods and others’ (141 million euros)This number is increasing 2.06 billion euros ($2.20 billion);
• And the total music of UMG publish revenue has increased 50.6% YoY arrive 476 million euros ($507 million) – although this significant increase is partly due to the fact that UMG now recognizes toll revenue differently than in the past.

Digging a little deeper into UMG’s Q2 numbers reveals that, for its recorded music business, streaming subscription revenue grew by single-digit percentages compared to in the same period last year:

• Recorded music by UMG subscribe to streaming Q2 revenue has increased 7.0% by year with constant currency to 966 million euros ($1.03 billion);
• Ad-sponsored UMG soundtrack /not registered Q2 streaming revenue grew 15.6% YoY with constant currency to 348 million euros ($371 million).

That 7.0% The increase in streaming revenue from recorded music subscriptions obviously seems a bit smaller than the kind of streaming growth metric we’re used to seeing from UMG.

There’s a caveat: In Q2 2021 (i.e. the quarter before the year), UMG’s subscription streaming revenue received what the company calls a “one-time catch-up payment from DSP” of up to 41 million euros.

With this payment discounted, UMG’s quarterly recorded music subscription streaming revenue for Q2 2022 will increase 164 million euros YoY.

As things hold up, including “one catch-up,” UMG’s recorded music subscription streaming revenue in Q2 2022 still grows 123 million euros by year.

It’s also worth pointing out another headline here: UMG Recorded Music Subscription Revenues Topped 1 billion USD in the second quarter, the second time in the company’s history, that Universal (EUR) reported figures were converted to USD at the average quarterly rate from the European Central Bank.

(Below, MBW has mapped UMG’s reported quarterly online revenue in EUR, then converted to USD at the prevailing average rate – according to the ECB – for each quarter.)

It’s a basic fact of math, of course, that as UMG’s quarterly subscription streaming revenue numbers grow, it’s getting harder and harder to maintain double digits year over year. percentage growth (i.e. it’s much easier to show a high percentage growth when your ‘base’ number is small; much harder when that ‘base’ number is large).

For example, UMG’s unregistered revenue for recorded music has increased 15.6% YoY in the second quarter of 2022. But in real terms, those revenues only increased 69 million euros Compared with the last year.

As mentioned, UMG subscription revenue for recorded tracks has increased thanks to a smaller sound 7.0% by year in Q2 2022. But in real terms, those revenues have actually increased 123 million euros.

Or to put it another way: UMG’s subscription streaming business is growing to twice the size of, in real terms, its ad-funded streaming business.

But percentage wise, because it’s growing from a smaller base, the ad-funded business (+15.6% YoY) – ostensibly – looks like it’s growing faster.

UMG subscription streaming revenue for half year of H1 2022 carries a 10.0% by year increase (in the equivalent six months of 2021) in constant currency.

Particularly in the first quarter of 2022, UMG posted 13.4% YoY increase subscription streaming revenue.

Elsewhere in UMG’s recorded music results for Q2: The company’s physical sales soar 17.4% YoY arrive €303 million ($323 million)while licensing revenue (including sync) has increased 6.3% YoY.

Universal’s best-selling artists for Q2 2022 on recorded music, in order of revenue generated: BTS, King & Prince, Rammstein, Olivia Rodrigo and INI.

In its latest results, UMG released its EBITDA figures for the half-year to the end of June (see above).

Those figures show that UMG’s company-wide EBITDA for this six-month period was 960 million euros ($1.05 billion)is equivalent to the amplitude of 20.3%.

The company’s adjusted EBITDA for the first 6 months of 2022 is at 962 million eurosis also equivalent to the amplitude 20.3%.

All references to YoY percentages in this story, whether stated as such or not, are in constant currency. All EUR-USD conversions are made at the average rate of the relevant period according to the European Central Bank.Worldwide music business