Streaming is driving up recorded music revenue at UMG, according to the latest results for the first half of 2017 from parent company Vivendi.
Recorded music revenues grew by 15.6% year-on-year at constant currency rates to €2.14 billion (£1.97 billion) as massive growth of 45.1% in streaming revenues easily offset the decline in both download and physical sales.
Streaming revenues hit €962 million (£885.8m) in the first half of the year. Streaming now accounts for 44.93% of recorded music revenues (including music sales, streaming and licensing).
Sales from digital downloads were down 18%. Physical revenues were down slightly - UMG said it benefited from a more physically-skewed release schedule in 2017.
Universal Music Group’s (UMG) overall revenues totalled €2.66 billion (£2.45 billion), up 14% at constant currency compared to the first six months of 2016. Sales were driven by growth across all divisions.
Universal Music Publishing Group also benefited from streaming, as well as synchronisation and performance revenue. The publisher’s revenues grew by 9.2% at constant currency to €400 million (£368m).
Merchandising and other revenues were up 2.2% at constant currency, driven by stronger retail sales.
Best-sellers for the first half of the year include new releases from Drake and Kendrick Lamar, as well as the 50th Anniversary edition of Sgt. Pepper’s Lonely Hearts Club Band by The Beatles. The Weeknd’s Starboy and soundtrack releases from the movies Moana and La La Land also continued to perform well into 2017. Despacito is the most streamed song of all time with over five billion streams across all streaming platforms.
UMG’s income from operations totalled €311m (£286m), up 40.8% at constant currency. EBITA amounted to €286m (£263m), up 58.4% at constant currency.
Today’s results also singled out the UMG and Spotify multi-year global agreement reached in April. “The deal advances their partnership to ensure that streaming realises its full transformational potential for artists, labels and fans by delivering a comprehensive range of music experiences, providing more flexibility for new releases, and collaborating on innovative marketing campaigns across Spotify’s platform,” said the statement. “It also provides UMG with unprecedented access to data.”
UMG is also expanding in China in a partnership with Tencent, including the development of Abbey Road Studios China, a recording studio inspired by the legendary London studio.