Universal Music Group Posts Double-Digit Q4 Revenue Growth, Reiterates Streaming-Reform Plans

Universal Music Group earnings
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Universal Music Group earnings
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Photo Credit: Tony Webster / CC by 3.0

Universal Music Group (UMG) generated north of €2.94 billion (currently $3.12 billion) during 2022’s final three months, when recorded music streaming revenue grew by nearly 19% year over year (YoY), according to a newly released earnings report.

The major label just recently posted its Q4 2022 (and full-year) performance specifics, including the aforesaid revenue total, which also represents a roughly 10.4% quarter-over-quarter (QoQ) increase. (It should be mentioned that Q3 revenue included a boost from an ISP infringement settlement.)

As usual, the lion’s share of the sum derived from recorded music, which UMG said accounted for €2.24 billion ($2.38 billion) or so during the three-month stretch.

Within the recorded figure, Universal Music Group pointed to €400 million ($424.45 million) in ad-supported streaming revenue (up about 10.5% QoQ and 13.3% YoY) as well as €1.04 billion ($1.10 billion) from streaming subscriptions (up 5.3% QoQ and 20.6% YoY). Q4 2022 was the first quarter in which the latter surpassed €1 billion.

During UMG’s Q4 earnings call, CEO Lucian Grainge took the opportunity to tout his company’s leading share of top-streamed artists on Spotify and other services, while likewise doubling down on previously announced plans to develop new streaming-compensation models.

The company is in talks with “several” major platforms (besides Tidal), Grainge relayed, further indicating that related announcements should be made “soon.”

Additionally, the 63-year-old took aim specifically at the streaming prevalence of “white noise” and other non-music tracks, and EVP of digital strategy Michael Nash touched upon a desire “to do a better job of monetizing” all “high-integrity, high-intent artists and relationships.”

In keeping with streaming’s years-running growth, downloads income declined to €63 million/$66.85 million (a falloff of 54% QoQ and 29.2% YoY), the earnings report shows, and strong holiday sales helped elevate physical revenue (from vinyl, CDs, etc.) 53% QoQ and 6.6% YoY to crack €404 million ($428.69 million).

€324 million ($343.34 million) from license and other (up 5.9% QoQ and 12.5% YoY) rounded out UMG’s Q4 2022 recorded revenue. Shifting to the publishing side, the company pinpointed €530 million ($561.63 million) in income, a hike of 26.8% QoQ and 29.9% YoY.

Digital made up more than half the total (€269 million/$285.06 million, up nearly 15% QoQ and 16% YoY), compared to €152 million/$161.07 million from performance (up 65.2% QoQ and 100% YoY), €59 million from sync (almost flat QoQ and YoY), and €25 million/$26.49 million apiece from mechanical and other (mechanical stayed roughly even YoY and other more than doubled from the third quarter).

Finally, UMG identified €181 million ($190.80 million) in merchandise revenue for Q4, down approximately 4.2% QoQ but up 28.4% YoY.

Universal Music’s overall 2022 revenue topped €10.3 billion ($10.92 billion), the business disclosed, as full-year net profit came in at €785 million ($832.28 million) – down from €888 million/$941.49 million in 2021 as artist costs rose by €904 million ($958.45 million) YoY to break €4.70 billion ($4.98 billion) total.

The publicly traded entity, which unveiled a song-rights deal with Sting in February of last year, also said that it had spent €359 million ($380.62 million) on catalogs during 2022.