Universal Music Group posts $2bn in Q3 2019 revenues

Strong merchandise sales and streaming revenues boosted by superstars like Billie Eilish, Taylor Swift and Post Malone have helped steer Universal Music Group to a two billion dollar quarter.

According to figures published by parent company Vivendi today (October 17), UMG’s Q3 2019 revenues were €1.8 billion ($2bn).

UMG’s total quarterly revenues of $2bn – across records, publishing, licensing and merch – represented an increase of 16% compared to the same quarter in 2018.

UMG’s total revenues for the first nine months of the year (ended September 2019) were €5.06bn ($5.7bn), up 17.5% on the same nine months of last year.

Taking a deeper dive into UMG’s numbers across the quarter (see below) reveals that the major’s Q3 2019 recorded music revenues were up 13.3% YoY to €1.4bn ($1.6bn).

Breaking down UMG’s recorded music segment even further shows that UMG’s streaming revenues increased 19.7% to €837m ($936m) in Q3 2019.

Revenues from physical sales increased 14.8% YoY to €230m ($257m).

Other digital sales (mainly downloads) revenues saw a decline of 11.5% to €108m ($121m) in Q3.

Licensing (and Other) revenues in Q3 were €201m ($225m), up 4.7% YoY.

Meanwhile, Music Publishing revenues in Q3 2019 were up 8.3% YoY to €293m ($328m).

Vivendi has also reported that UMG merchandise revenues soared by 82.4%, from €73m ($85m) in Q3 2018, to €136m ($152m) in Q3 2019.

Elsewhere in the report, UMG’s total recorded music revenues for the first nine months of the year were up 15.6% compared to the same nine months in 2018, to €4bn ($4.5bn).

Subscription and streaming revenues for the first nine months of the year were €2.4bn ($2.7bn), an increase of 23.4% on the first nine months of 2018.

Merchandise revenues also rocketed by 82.4% in the nine months to the end of September, to €338m ($381m).

As reported earlier today, Vivendi has also provided investors with an update on the UMG stake sale process, revealing that due diligence on Tencent Holdings’ bid to acquire 10%-20% of UMG is due to be finalized in the coming weeks.

According to Vivendi’s update, Tencent’s bid comprises a “strategic investment of 10% of the share capital, with [an] option to acquire an additional 10%”.

Vivendi also said that it could potentially sell an additional minority stake in UMG to other partners.

Said Vivendi: “[There is a] continuing process for the potential sale of an additional minority stake in UMG to other partners. Some have already expressed an interest in investing at a similar price level.”

Vivendi initially announced its intention to sell off up to half of UMG last July and at the time recommended a ‘sale of up to 50% of UMG’s share capital to one or more strategic partners, in order to extract the highest value’.

Last July Vivendi also said that it could possibly complete the UMG process by the end of January 2020.

A Bloomberg report in May this year then suggested that the UMG’s parent company was facing difficulties in the sale process, citing sources who said that “some private equity investors balk at the high price and slow pace of the deal”.

 Music Business Worldwide

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