Is the streaming plateau’s end in sight? Perhaps, as Universal Music Group has posted solid Q4 2024 subscription-revenue growth and confirmed ongoing Super Premium talks with ‘all’ its DSP partners. Photo Credit: UMG
Thanks to solid subscription gains – and despite a more than 5% slide on the ad-supported side – Universal Music Group (UMG) achieved 7.2% YoY revenue growth during 2024’s final quarter.
The leading label disclosed as much in an earnings report this afternoon, amid continued streaming-plateau concerns as well as adjacent superfan-monetization efforts. At those points’ intersection, UMG last year doubled down on an aggressive streaming forecast, projecting an 8-10% compound annual growth rate for subscription revenue through 2028.
In other words, the company’s paid-listening showing is important on multiple levels. Digging into the appropriate section of UMG’s Q4 earnings report, then, overall recorded streaming revenue jumped 4.6% YoY to $1.73 billion/€1.60 billion.
Behind the sum, the initially mentioned ad-supported streaming slipped 5.1% YoY to $404.53 million/€375 million, compared to a 7.9% YoY spike for its subscription counterpart ($1.32 billion/€1.23 billion).
As usual, a few background details are especially significant here. First, execs described “weakness from fitness platforms” as a drag on fourth-quarter streaming growth.
Second, UMG recognized $21.58 million/€20 million in DSP “catch-up income” during the fourth quarter, besides a pair of legal settlements.
One of the latter pertained to a JV exit, the other concerned a copyright suit, and both added a combined $43.18 million/€40 million or so in revenue for Q4, $34.53 million/€32 million of which was classified as recorded, UMG indicated.
(Though there are several possibilities on this front, Universal Music, BMG, and Concord formally settled a copyright battle with ISP Altice in mid-August 2024, it’s worth reiterating. Altice subsequently identified almost $47 million in “impairments,” and UMG today said that the settlement had been “booked” in Q4.)
Less these once-off boosts, Universal Music’s Q4 revenue increased 6.1% YoY at constant currency – with a 4.6% YoY uptick in the recorded category (or 6% with the settlement and catch-up compensation) for the fourth quarter.
Rounding out said category, the A-Sketch majority owner pointed to $494.15 million/€458 million in physical sales (up 2.5% YoY) and $498.46 million/€462 million from license and other (up 12.7% YoY and housing much of the settlements windfall).
Shifting to publishing, total fourth-quarter revenue hit $661.40 million/€613 million (up 6.4% YoY or 5.6% at constant currency when excluding the settlement), including $407.84 million/€378 million (up 11.5% YoY) for digital. And merch, for its part, enjoyed a 22.8% YoY hike to $284.84 million/€264 million during Q4.
As for UMG’s performance across the entirety of 2024, revenue finished at $12.77 billion/€11.83 billion (up 6.5% YoY), with EBITDA of $2.52 billion/€2.33 billion (up 29% YoY) and recorded paid-streaming revenue of $4.99 billion/€4.62 billion (up 8.2% YoY).
Meanwhile, in the corresponding earnings call, UMG execs didn’t break a ton of new ground. After CEO Lucian Grainge opened by offering “greetings to everyone from Hilversum” (and perhaps making a broader point in the process), higher-ups emphasized their continued “Streaming 2.0” and superfan ambitions.
Universal Music, chief digital officer Michael Nash elaborated, is engaged in “conversations with all of our partners about Super Premium tiers.” Also on the horizon is “phase two” of Universal Music’s cost-savings program, the company confirmed.
Content shared from www.digitalmusicnews.com.