Streaming might be helping the major record companies bounce back – but the biggest money in the music business still appears to be on stage.
Live Nation has just posted a record third quarter revenue-wise, while forecasting a year of record results for 2016.
Revenue was up 21% in the three months to end of September at $3.17bn, with operating income up 25% to $191.3m.
Net profit stood at $132.8m in the three months, evening out at $113.3m for the first nine months of the year.
Revenues from Jan-Sept inclusive stood at $6.56bn, up 19% year-on-year (21% at constant currency).
If Live Nation’s revenues continue this growth pattern in Q4, it will post around $2bn for the three months – up on the $1.74bn reported sales in the last quarter of 2015.
In total, therefore, Live Nation is expected to record annual revenues in 2016 at somewhere around $8.5bn.
To put that into perspective, Sony’s recorded music business posted 280.65bn Yen ($2.7bn) in the first nine calendar months of this year – and is expected to add somewhere around 120bn Yen ($1.1bn) in the three months to end of December.
Universal’s recorded music business, meanwhile, turned over €1.83bn ($2.07bn) in the six months to end of June.
We’re awaiting UMG/Vivendi’s Q3 calendar results, but it’s a safe bet that its recorded music sales will finish 2016 somewhere between €4bn and €4.5bn – or just shy of $4.5bn (Euros and US Dollars are currently tracking at very similar value points).
These figures don’t take into account publishing or other income streams outside of recorded music.
In total, then, Sony and Universal’s combined record label activities should generate somewhere around $8.3bn this year.
It’s going to be close, but Live Nation looks likely to trump that figure on its own.
“By paying artists more, while continuing to build our profitability as well, we further differentiate our concert business and are able to build global market share to drive our flywheel.”
Michael Rapino, Live Nation
If it does so, the biggest contributor to its bottom line would have been its concerts business, which saw 25% growth in Q3 to $2.5bn.
“We are benefiting from our ticket pricing initiatives, notably increasing the pricing on the most attractive tickets,” Live Nation CEO Michael Rapino told investors.
“As a result, our average ticket price grew by 7% through September, which enabled us to increase what we pay artists by $450 million on shows this year.
“By paying artists more, while continuing to build our profitability as well, we further differentiate our concert business and are able to build global market share to drive our flywheel. At the same time, we continue to attract artists to our management business that provides a strong global pipeline of shows and supports our strategic growth initiatives.”
Artist Nation, Live Nation’s artist management arm, generated $150.8m in the third quarter, but posted a $8.36m operating loss.
In the first nine months of the year, Artist Nation has built up a $34.4m operating loss.
Click on any of the below tables to enlarge.