A couple of months ago, MBW noted that Universal Music Group’s global recorded music operation had reached a historic moment, with digital income overtaking physical and licensing revenues combined.
Now the world’s biggest record company has reached yet another major milestone, as streaming finally pulls more cash into its business than digital downloads worldwide.
UMG has today revealed that its recorded music income in the first nine months of 2015 hit €2.75bn ($2.95bn) – up 12.3% year-on-year or 1.9% at constant currency/perimeter.
Within that figure, digital income was up 5.9% (at constant currency/perimeter) to €1.38bn ($1.48bn) – equating to 50.1% of the total pie.
Meanwhile, physical sales were down 7.9% on the same basis to just €867m ($929m), while income from ‘License & other’ – effectively, think ‘sync plus’ – climbed 11.3% to €505m ($541m).
Remember: this is for the first nine months of the calendar year, to the end of September. (You can expect ‘Q4’ to be a little more physical as people buy gifts for Xmas.)
Although UMG hasn’t told us what its specific income was from streaming for this period, it has revealed this data for Q3 – the three months ended September 30 this year.
And it’s here Universal’s recorded music business reaches another landmark: streaming revenues (including subscription and ‘free’) were up 33% year-on-year in Q3, while download income fell 8%.
As a direct result, streaming accounted for 51% of its digital income in this period.
UMG isn’t the first major to reach this inflection point, though: streaming income overcame download at Warner Music Group in its fiscal Q2 earlier this year.
Total Q3 income across all of UMG’s divisions was €1.18bn.
The news arrives within the Q3 financial figures of UMG parent Vivendi.
Total revenues across Universal’s recorded music, publishing and merchandising operations (‘Universal Music Group’) grew to €3.49bn ($3.74bn) in the nine months to end of September.
That was up 12.8% in actual terms, and 2.1% year-on-year at constant currency and constant perimeter – which evens out currency exchange bumps caused by one off sales.
Revenues at Universal Music Publishing Group jumped 12.8% (or 2.6% at constant currency/perimeter) in the nine month period.
Interestingly, profitability isn’t growing in tandem.
According to the results, UMG’s EBITA was €259m ($277m), down 8.7% at constant currency and perimeter (-5.4% on an actual basis) compared to the first nine months of 2014.
Parent Vivendi said this was “due to the revenue mix impact on margins as well as a difficult comparison against 2014 figures which include the favorable impact of a reversal of provisions”.
Vivendi also said that UMG’s big releases for the following three months will include albums from Justin Bieber, Andre Rieu and German star Helene Fischer, as well as the soundtrack to hotly-anticipated Star Wars movie The Force Awakens (pictured).Music Business Worldwide