Welcome to Music Business Worldwide’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs.
The Q3 earnings cycle continued this week with Spotify and Universal publishing their results for the three months to end of September.
On Thursday (October 27), Universal Music Group posted Q3 revenues of EUR €2.664 billion (USD $2.68bn) across all of its divisions (including recorded music, publishing and more).
Streaming and merch revenues were two of the quarter’s biggest highlights for UMG.
Universal’s subscription streaming revenues specifically grew 8.7% YoY at constant currency to €991 million ($998m) in Q3, driven, according to UMG, “by the continued healthy growth in music subscribers”.
UMG’s merch revenues grew by a whopping 101.1% YoY at constant currency to €189 million ($190.32m) in Q3.
Meanwhile, Spotify reported that it added 7 million net Premium subscribers to its user base in Q3, taking its total global paying subs audience to 195 million.
In terms of finances, Spotify generated EUR €3.036 billion (USD $3.06bn) in quarterly revenues in Q3, up +12% YoY at constant currency. Subscriber/Premium revenues weighed in at €2.651 billion ($2.70bn) in Q3, up +13% YoY at constant currency.
SPOT CEO Daniel Ek also told investors during the company’s earnings call this week that Spotify will consider raising its prices in the US, following recent price hikes by rivals Apple Music and YouTube.
An individual Apple Music subscription has gone up by $1 to $10.99 per month, while YouTube upped the price of its Premium Family Plan by 28% to $22.99.
Also this week, blank-check company The Music Acquisition Corporation wrote to its stockholders to seek approval, via a vote, to liquidate early, while CISAC reported that global music collections hit EUR €8.48 billion in 2021 (USD $10.02 bn).
Here’s what happened this week.
1) UNIVERSAL GENERATED NEARLY $1 BILLION FROM SUBSCRIPTION STREAMING IN Q3, AS OVERALL REVENUES GREW 13.3% YOY
Over the summer, Bill Ackman’s Pershing Square predicted that Universal Music Group “can grow revenues at an annual rate of 10% or so for more than a decade”.
Right now, Universal is meeting that challenge.
UMG published its financial results for the three months to end of September on Thursday (October 27). The company posted Q3 revenues of EUR €2.664 billion (USD $2.68bn) across all of its divisions (including recorded music, publishing and more)…
2) SPOTIFY ADDED 7M PREMIUM SUBSCRIBERS IN Q3 – AND HAS ADDED 15M IN 2022 TO DATE
Doomsday analysts keep on concluding that entertainment subscriptions are in for a rough ride in 2022 due to macroeconomic pressures. Spotify keeps on defying them.
In Q3 2022 (the three months to end of September), Spotify added another 7 million net Premium subscribers to its user base, taking its total global paying subs audience to 195 million.
That figure was revealed on Tuesday (October 25) via the announcement of Spotify’s official Q3 results.
SPOT’s 195 million subs base is a full 15 million subscribers ahead of where Spotify was at the close of 2021 (180m).
The 7 million growth in Q3 subs was ahead of Spotify’s own guidance of +6 million…
3) GLOBAL SONGWRITER ROYALTY COLLECTIONS TOPPED $10BN IN 2021, BUT WERE STILL BELOW PRE-PANDEMIC LEVELS
Publisher and songwriter royalties collected by their societies globally hit EUR €8.48 billion in 2021 (USD $10.02 bn).
Although that total royalties haul represented a 7.2% rise versus 2020, it remained below pre-COVID levels, highlighting the impact of lockdowns on live performances.
That’s according to CISAC‘s Global Collections Report 2021, published Thursday (October 27).
4) APPLE MUSIC JUST RAISED ITS SUBSCRIPTION PRICE TO $10.99 IN THE US. WILL SPOTIFY BE NEXT?
Apple is increasing the pricing for Apple TV+, Apple One, and Apple Music worldwide.
In the US, starting from Monday (October 24), an individual Apple Music subscription will go up by $1, from the current $9.99 price point to $10.99 per month.
In a statement provided to MBW, Apple said that the change in its Apple Music pricing “is due to an increase in licensing costs” and that, “in turn, artists and songwriters will earn more for the streaming of their music…”
5) $200M SPAC, THE MUSIC ACQUISITION CORP, FILES TO LIQUIDATE EARLY AND DELIST SHARES FROM NYSE
Over the past couple of years, we’ve seen a number of big-money SPACs launch and merge with music companies to take their chosen targets public.
One such SPAC emerged back in January 2021, when Music Business Worldwide revealed that long-time Geffen Records President Neil Jacobson was plotting a flotation of a new music company in the US.
Jacobson’s blank-check company, The Music Acquisition Corporation (TMAC), floated on the New York Stock Exchange in February last year under the ticker symbol TMAC.U, raising $230 million in the process.
TMAC.U, formed specifically to effect a merger/acquisition in the worlds of both music rights and music tech has been largely quiet since then – something that now doesn’t look likely to change in the near future.
According to a new filing with the Securities Exchange Commission (SEC) in the US, Jacobson’s SPAC has written to its stockholders to seek approval, via a vote, to liquidate early…
MBW’s Weekly Round-Up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs.
Music Business Worldwide