Universal Music Group has reported a 12.4% increase in streaming revenues during the first half of 2020.
Parent company Vivendi also reiterated its plan for a UMG IPO by 2023 at the latest. It follows the sale of a 10% stake in UMG to a consortium led by Tencent Holdings, which was finalised in March.
“We are very pleased to welcome Tencent as a great new partner and are looking forward to the tremendous growth opportunities,” said CEO Arnaud de Puyfontaine.
During the earnings call, he confirmed plans for the sale of further minority stakes in the major, led be CEO/chairman Sir Lucian Grainge (pictured).
"We have been approached by many different interests," said de Puyfontaine. "The process is currently happening."
Overall UMG revenues for the first six months were up 3.5% year-on-year at €3.459 billion (£3.125bn).
Recorded music revenues grew by 3.7% year-on-year thanks to the increase in subscription and streaming revenues, as well as the receipt of a digital royalty claim. UMG recently renewed its licensing deal with Spotify.
The growth was achieved despite the impact of the Covid-19 pandemic, which mainly affected the second quarter of 2020. Physical sales were down 22.4% compared to the first half of 2019, while download sales declined by 23.1%.
During Q2, physical sales were down 39% year-on-year, a rate of decline which meant there was a rare dip in overall recorded music revenue in the quarter (down 4.5% year-on-year).
Recorded music bestsellers for the first half of 2020 included new releases from The Weeknd, Justin Bieber, King & Prince, Eminem and Lil Baby, as well as continued sales from Billie Eilish and Post Malone.
We are very pleased to welcome Tencent as a great new partner and are looking forward to the tremendous growth opportunities
Arnaud de Puyfontaine
UMG ended the first half of 2020 with seven of the Top 10 most consumed artists in the United States, according to Nielsen. In addition, the major continued to expand its global footprint, opening offices in Morocco and Israel, launching Def Jam Africa based in South Africa and Nigeria, and announcing key partnerships with Sugar (Italy), the Aristokrat Group (Africa), and Desi Melodies (India).
Music publishing revenues grew by 21.2% compared to the first half of 2019, driven by increased subscription and streaming revenues, as well as the receipt of a separate digital royalty claim.
For the first half of 2020, Universal Music Publishing Group (UMPG) signed songwriters including Taylor Swift, Kenny Chesney, Surfaces, Luke Combs, Marisa Monte and Meduza.
Merchandising and other revenues were down 41.4% compared to the first half of 2019, due to the impact of the pandemic on both touring and retail activity.
For the first half of 2020, UMG’s EBITA was €567m (£512.3m), up 16.6% compared to the first half of 2019, driven by revenue growth and cost control.
All percentage increases are based on Vivendi’s constant currency and perimeter measure.
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