Universal Music Group is worth more than $50 billion, as firm’s share price hits highest point in 2 years

UMG Chairman/CEO, Sir Lucian Grainge

Universal Music Group (UMG) is finishing 2023 with a bang.

The world’s largest music rightsholder ended its trading day today (December 12) on the Amsterdam Euronext with its highest share price of the year to date.

In fact, with a share price of EUR €25.77, UMG finished today with its largest public valuation for two years.

According to Euronext data, UMG’s share price today translated into a market cap valuation of EUR €46.944 billion.

In US Dollar terms at current exchange rates, that’s worth USD $50.68 billion.

This is Universal’s highest share price since December 7, 2021 (€25.78) – just over 24 months ago.

UMG’s share price peak came in mid-November 2021, when its day-close stock price crested at €27.72.

Universal’s stock price journey in calendar 2023 (source: Google Finance). The company’s share price/market cap has risen by 12.39% since the start of the year.

Universal’s current stock price (€25.77) is up by 12.39% year-to-date.

That growth has been helped by positive analyst reaction to UMG’s efforts around the ‘artist-centric’ royalty model – including a partnership with Deezer that has changed how artists are paid by the platform in France.

The company’s ‘artist-centric’ philosophy – first laid out by Chairman/CEO, Sir Lucian Grainge, in January – also appears to have had an inluence on changes coming to Spotify‘s royalty model in Q1 2024.

Universal has enjoyed a robust financial year so far: In the first nine months of 2023, UMG’s overall revenues hit EUR €7.901 billion, up by 9.4% YoY at constant currency.

In terms of recorded music streaming revenues – including ad-supported and subscription – UMG generated EUR €4.169 billion in the first nine months of this year, up by 9.7% YoY in constant currency.

Universal Music Group is currently worth more in terms of public valuation than the world’s largest audio streaming service, Spotify.

Spotify’s share price has risen in the past eight days following news – announced by CEO Daniel Ek last Monday (December 4) – that the company is to lay off approximately 1,500 people, around 17% of its global workforce.

At the close of today (December 12) on the New York Stock Exchange, Spotify’s share price stood at USD $199.00 – representing a year-to-date increase of a remarkable 142.98%.

Even so, Spotify’s market cap is significantly smaller than Universal Music Group’s with the end of 2023 in sight.

According to Google Finance, Spotify’s market cap at the close of today was USD $38.83 billion – that’s around USD $12 billion lower than UMG’s.

MBW recently reported on a filing from Universal Music Group with the US Copyright Office (USCO), which set out UMG’s position on the thorny topic of copyright and generative AI platforms.

UMG’s submission, which became publicly available in November, railed against the idea that the ingestion of copyright material by generative AI platforms could be deemed ‘fair use’ under US law.

In a written answer to a question posed by the USCO that asks, “under what circumstances would the unauthorized use of copyrighted works to train AI models constitute fair use?”, UMG’s submission was unequivocal.

“The wholesale appropriation of UMG’s enormous catalog of copyright-protected sound recordings and musical compositions to build multibillion commercial enterprises is anything but fair use,” said UMG.

“It is simply theft on an unprecedented scale that threatens the core of our business and our mission.”

Universal Music Group on AI systems ingesting copyrighted material without permission

It added later in the section: “We can think of no precedent for finding this kind of wholesale, commercial taking that competes directly with the copyrighted works appropriated to be fair use”.

UMG argued that “such appropriation” – training AI systems with copyrighted material without permission – “falls outside of the broad justifications that typically characterize fair uses – such as parodic comment or factual news reporting – and does not satisfy the statutory standards for fair use”.

It added: “It is simply theft on an unprecedented scale that threatens the core of our business and our mission.”Music Business Worldwide