Universal Music Posts Nearly $11 Billion in 2022 Revenue as Company Expands Efforts for ‘New Streaming Model’
Universal Music Group posted booming results for 2022, with revenues soaring 21.6% to nearly $10.95 billion, driven by streaming and a strong performance from its recorded music and publishing divisions.
Recorded music’s revenues from streaming and subscriptions were up around 19% to over $5.6 billion, while digital revenues form publishing division were up a whopping 50% to $1.05 billion.
Top sellers for the year included Taylor Swift, BTS, the “Encanto” sountrack, Olivia Rodrigo, Morgan Wallen and the Beatles, while top sellers for the fourth quarter were Swift, the Beatles, Drake, Seventeen and Lil Baby.
Also in the announcements and the earnings call, the company revealed that it has expanded its project with Tidal to come up with a new economic model for streaming to include Deezer, which is the no. 1 streaming service in France and the fifth-largest in the world. “Streaming has evolved in a way that undervalues the critical contributions of many artists as well as the engagement of many fans,” Grainge said on the call.
His annual letter to the company’s staff in January included a strongly worded section in which he wrote that the streaming payment model has become drastically outdated and “needs to evolve.” He continued, “What’s become clear to us and to so many artists and songwriters — developing and established ones alike — is that the economic model for streaming needs to evolve. As technology advances and platforms evolve, it’s not surprising that there’s also a need for business model innovation to keep pace with change… Under the current model, the critical contributions of too many artists, as well as the engagement of too many fans, are undervalued.” Hopefully artists and songwriters will share in the benefits of the company’s booming profits.
The call also revealed that ABBA’s “Voyage” virtual concert, the most sophisticated (and expensive) of its kind, will be playing in cities across the globe, after selling more than 1 million tickets in its first nine months at a specially built theater in London.
Crunching the numbers, revenue was up 21.6% year over year, or 13.6% in constant currency, to around $10.95 billion for 2022. EBIDTA was up 20.3%, or 12.5% in constant currency, to $2.15 billion. Operating profit rose 14.8%, or 7.9% in constant currency, to $1.69 billion, while net debt dropped 10% to $1.9 billion.
Recorded music revenue overall rose 16.3%, or 8.8% in constant currency, to around $8.4 billion. Subscriptions and streaming revenue rose 18.7%, or 9.8% in constant currency, $5.6 billion. Physical revenues rose 7.7%, or 4.1% in constant currency, to $1.27 billion. Licensing and other revenue rose 19.6%, or 13.4% in constant currency, to $1.06 billion.
Music publishing revenues overall rose 34.8%, 26.3% in constant currency, to $1.9 billion. Performance revenues rose 24.9%, or 18.2% in constant currency, to $393 million. Synch revenues were up 18.6%, or 10.3% in constant currency, to $250 million.
Merchandising and Other revenue in the fourth quarter of 2022 was €181 million, up 28.4% year-over-year, or 14.6% in constant currency, on growth in touring-related merchandising revenue.
The company also pointed to its technology efforts for catalog artists, singling out the “ABBA Voyage” digital avatar concert, Elton John’s “Beyond the Yellow Brick Road” experience on Roblox, and the Beatles’ “Revolver” Spatial Audio release.
“Today’s report demonstrates that, once again, we continue to successfully manage the company for long term growth while driving strong results in our core business—developing great artists and introducing their music to fans around the world,” said Lucian Grainge, UMG’s Chairman and CEO. “Our roster—which features four of the top five, and 15 of the Top 20 IFPI Global Artists of the Year—once again achieved enormous commercial and creative success in markets around the world. We also worked to evolve and expand relationships with our existing DSP partners as well as establish new ones in fitness, health, gaming and the metaverse, driving the industry forward though leadership, creativity, innovation and collaboration.”
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