Streaming is paying Universal $4m a day – but iTunes income is crashing

Streaming services paid Universal Music Group an average of $3.9m a day in the first three months of this year – comfortably outstripping both download and physical sales.

Revenue for UMG’s recorded music catalogue from the likes of Spotify and Apple Music – across subscription and ad-funded – was up 59.7% in Q1 to €307m ($351m).

However, download income was down by a mammoth 32% year-on-year – providing a comparatively weak Q1 sum of approximately €197m ($225m).

That meant a dramatic reduction in download income (really, iTunes income) of around €93m ($106m) compared to the same period in 2015.

(All figures here are at constant currency/perimeter.)

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Although Q1 is typically a quiet time for frontline releases – which plays to streaming’s strengths – this is a seismic crash in revenues from download in anyone’s book.

Not that Universal will be too worried: MBW estimates that streaming’s growth piled at least an additional €116m ($133m) onto its bottom line in Q1 – more than enough to offset the painful shortfall from iTunes.

As a result of streaming’s strength, Vivendi-owned UMG’s total digital sales still managed to rise.

They hit €504m ($576m) in Q1, up 7.9% on 2015.

Physical sales fell 16.6% to €236m ($270m), with licensing/other income rising 10.5% to €150m ($171m).

Total recorded music income at UMG across the quarter was up 0.5% to €890m ($1.02bn).

Music publishing income (UMPG) rose 0.3% to €188m ($215m), helping UMG’s overall revenues across all its business divisions grow 0.6% to €1.12bn ($1.28bn).

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Streaming claimed a whopping 41% of Universal’s direct recorded income in the period, compared to downloads and CD/vinyl – and also claimed 61% of digital income.

Even when licensing (sync/performance) is factored in, streaming was still the dominant revenue generator, with 34% of the total income pie vs. 22% for download and 27% for physical.

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 Music Business Worldwide

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