Universal Music Reports Nearly 6% Q1 2024 Revenue Growth as Streaming Achieves Double-Digit Increase

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Universal Music Group (UMG) revenue climbed 5.8% during 2024’s opening quarter due in part to a 10.7% bump in the streaming-subscription category.

The major label, now poised to generate more than 1% of its annual revenue from TikTok, posted the Q1 2024 financials today. Factoring for the 5.8% year-over-year (YoY) improvement, revenue hit $2.78 billion (€2.59 billion) in the first quarter, UMG relayed.

In keeping with industry-wide trends as well as price increases from Spotify and others, nearly 57% of the sum, $1.58 billion (€1.47 billion), derived from streaming (up 10.3% YoY). Behind the total, the Hybe-partnered business acknowledged $368 million (€343 million) from ad-supported streaming (up 8.9% YoY) and attributed the remaining $1.20 billion (€1.12 billion) to subscription-based listening (up 10.7% YoY).

Also in keeping with industry-wide trends and specifically streaming growth, permanent downloads and other digital sources delivered $49.35 million/€46 million (down 16.4% YoY). Physical revenue, including from vinyl and CDs, slipped 18.5% YoY to $273.54 million (€255 million); UMG chalked up the falloff “to a very difficult year-over-year comparison, particularly in Japan.”

Lastly, on the recorded side, UMG’s “license and other revenue” declined 1.8% YoY to $238.14 million (€222 million) in Q1. Best-selling acts on the quarter included the usual suspects, among them Taylor Swift, Olivia Rodrigo, Ariana Grande, Morgan Wallen, and Noah Kahan.

Shifting to publishing, Universal Music Group disclosed $532.06 million/€496 million in revenue (up 16.7% YoY), led by digital at $304.70 million/€284 million (up 22.9% YoY) and then performance at $122.31 million/€114 million (up 26.7% YoY).

Rounding out the category, sync revenue came in at $66.51 million/€62 million (down 10.1% YoY), mechanical improved 8.7% YoY to $26.82 million/€25 million, and other publishing fell 8.3% YoY to $11.80 million/€11 million.

Merchandising and other such revenue finished at $122.29 million (€114 million) for Q1 2024, with EBITDA jumping 87.7% YoY to $525.62 million (€490 million). During today’s trading, Universal Music stock (UMG on the Euronext Amsterdam) dipped 1.4% to $29.94 (€27.91) per share.

Overall, UMG’s Q1 earnings call was free of particularly groundbreaking developments; execs underscored their support for continued streaming price increases and especially higher-cost tiers geared towards superfans. Predictably, the new TikTok deal factored prominently into the call as well, though most of the involved information had already been covered in an internally circulated company memo.

“We can say we’ve seen substantial improvement in the total value that we derive from the relationship through the combined components of what we have described as a multifaceted deal,” weighed in UMG chief digital officer Michael Nash. “On compensation specifically, revenue under this new deal does mark an improvement over our last deal.

“There are, of course, other aspects of economic value of any deal that don’t necessarily show up in the revenue line. Including things like ecommerce, ad credits, data, marketing programs – other important facets of the platform relationship that we have with TikTok,” he proceeded.

“It’s the invisible stuff,” elaborated CEO Lucian Grainge. “We know what’s visible. But in terms of what we can disclose and what we can explain, it’s the invisible stuff, on the commitments that we both made to one another, that are once again win-win.”