Universal generated $2.6bn in Q1, as subscription streaming revenues jumped over 10% YoY

Credit: Universal/press
King & Prince

Universal Music Group published its Q1 2023 financial results on Wednesday (April 26), for the three months to end of March.

The headline figure from the results: The company generated Q1 revenues of EUR €2.451 billion (USD $2.62bn) across all of its divisions (including recorded music, publishing and more).

That Q1 revenue figure was up 9.3% YoY at constant currency, driven by growth in Recorded Music and Music Publishing.

As you’ll read in our analysis below, highlights in UMG’s Q1 included a 10.3% jump in the company’s subscription streaming revenues, and strong physical sales in the world’s second-largest recorded music market, Japan.


Universal’s overall recorded music revenues for Q1 2023 (including streaming plus physical etc.) were €1.923  billion ($2.06bn), up 9.6% YoY at constant currency (see below).

Within the Recorded Music segment, UMG’s ‘Subscription and streaming revenues’ (including ad-supported and subscription streaming revenues) grew 7.1% YoY at constant currency to €1.329 billion ($1.42bn).

Breaking UMG’s recorded music streaming figure down further reveals that the company’s subscription streaming revenues specifically grew 10.3% YoY at constant currency to €1.014 billion ($1.08bn).

It’s worth noting that two prominent music streaming services, Apple Music and Amazon Music, raised the prices of their flagship individual premium services in the second half of 2022, which would likely have had a positive impact on global recorded music revenues in Q1 2023, versus Q1 2022.

UMG doesn’t point to this as being a factor, however, stating that its subscription streaming revenue result in Q1 was driven, “primarily by the growth in global subscribers”.

This fact was evidenced by Spotify’s results, published yesterday (April 25), which revealed that its own Premium Subscriber base grew 15% YoY, to reach 210 million total paying users – 3 million above the company’s guidance for the quarter.

Universal’s ad-supported recorded music streaming revenue, meanwhile, was down 2.2% YoY at constant currency (see above) to €315 million ($337.99m). UMG said that “the advertising industry continued to be impacted by a difficult economic environment”.

Within Universal’s recorded music business, physical revenues grew 32.6% YoY at constant currency to €313 million ($335.84m).

UMG says that this growth was driven “by strong CD and DVD sales in Japan and improvements in vinyl sales”.

As highlighted by UMG Chairman and CEO Sir Lucian Grainge on the company’s call with analysts on Wednesday (April 26), Japanese pop stars King & Prince, one of UMG’s top sellers in the quarter, sold over 1 million CD copies of their single Life Goes On in its first week. Grainge noted that was “the first time in three years that sales threshold was crossed”.

Elsewhere in UMG’s recorded Music segment, ‘License and other revenue’ grew 8.1% YoY at constant currency to €226 million ($242.49m).

In addition to King & Prince, top sellers for the quarter included releases from Morgan Wallen, Taylor Swift, TOMORROW X TOGETHER and back number.

UMG’s revenues generated by ‘merchandising and other’ revenue in Q1 2023 was €107 million ($114.81m), which was down 3.6% at constant currency.

Universal says that this decrease was “due to a difficult comparison on touring merchandise sales against last year’s pent-up demand for touring following a post-Covid reopening, as well as a decline in retail sales, offset by an increase in direct-to-consumer sales”.

Discussing the results on the company’s earnings call, Boyd Muir, EVP, CFO and President of Operations for UMG, noted that this result was “partially offset by strong sales in [UMG’s] direct to consumer sales”.

Later on the call, Muir pointed to factors impacting merch revenues including touring schedules, and noted that Q1 “is the quietest quarter for touring”.

He added: “If you look at this with with sufficient long term lens, we definitely see growth for a considerable future for our merchandising business”.

Music Publishing

Elsewhere, Universal’s Music Publishing division, Universal Music Publishing Group, generated revenues of €425 million ($456.02m) in Q1 2023.

That was up 11.5% YoY at constant currency.

Within Music Publishing, digital revenue grew 19.1% YoY at constant currency to €231 million ($247.86m), driven, according to UMG, “by continued growth in streaming & subscription”.

Synchronisation revenue grew 7.8% YoY at constant currency to €69 million ($74.03m), due “to continued growth in synchronization opportunities for music”, according to UMG.

Mechanical revenue was flat YoY at constant currency, at €23 million ($24.67m).

“Our strong start to the year demonstrates our consistency in developing great artists and introducing their music to fans around the world.”

Sir Lucian Grainge, UMG

“Our strong start to the year demonstrates our consistency in developing great artists and introducing their music to fans around the world,” said Sir Lucian Grainge, UMG’s Chairman and CEO.

“We look forward to building on this momentum and furthering our track record of transforming disruptive technologies into opportunities to accelerate our business for our artists, fans and shareholders.”


In Q1 2023, UMG’s EBITDA (earnings before interest, taxes, and depreciation) fell 43.4% YoY at constant currency, to €261 million ($280.05m).

EBITDA margin was 10.6%, compared to 20.6% in the first quarter of 2022 (see below).

According to UMG,  “this decline was driven by non-cash share-based compensation expenses of €261 million ($280.05m) during the first quarter of 2023, compared to €1 million ($1.121m) of non-cash share-based compensation expenses during the first quarter of 2022″, after the company rolled out its first global equity compensation plan, which began in Q4 2022.

Excluding non-cash share-based compensation expenses, UMG reports that its Adjusted EBITDA for Q1 was €522 million ($560.1m), up 13% in constant currency and that its Adjusted EBITDA margin expanded 0.6 percentage points to 21.3%, compared to 20.7% in the first quarter of 2022, as a result of revenue growth, operating leverage and cash compensation savings of €9 million associated with the equity plan rollout.

“With revenue up 9% and Adjusted EBITDA up 13%, we’re encouraged by our first quarter and remain on track to meet our plans for the year.”

Boyd Muir, UMG

Boyd Muir, EVP, CFO and President of Operations for UMG added: “Our results reflect the continued evolution of our business towards consistent and predictable revenue from a growing array of sources.

Boyd Muir, EVP, CFO and President of Operations for UMG added: “Our results reflect the continued evolution of our business towards consistent and predictable revenue from a growing array of sources.

All EUR-USD conversions in this report for Q1 2023 have been made as the average prevailing quarterly rate as identified by the European Central Bank.Music Business Worldwide

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