Gains from streaming and Subscription services more than offset declines in physical product and digital downloads.
Streaming and subscription services led Universal Music Group to a
modest gain in 2015, accounting for 52 percent of the company's digital
recorded music revenues in the second half of the year. The revenue
figure and digital milestone were released in Thursday's earnings release by parent company Vivendi.
revenues were €5.11 billion ($5.66 billion), up 2.7 percent at constant
currency, a measure that eliminates foreign currency fluctuations which
can impact earnings reported a single currency. Revenue was up 12.1
percent as reported by Vivendi. The 43 percent growth in subscription
and ad-supported streaming revenues "more than offset" declines in
physical products and digital downloads.
The company characterized
itself as having "positive momentum in the business" and believes it
will achieve "enhanced results in 2017 and beyond."
All three core
segments of Universal Music's business reported gains. Recorded music
revenues were up 2.4 percent to €4.11 billion ($4.56 billion -- all
earnings numbers will be reported at constant currency). Music
publishing revenues rose 3.0 percent to €756 million ($839 million).
Revenue at the "Merchandising and other" category grew 3.5 percent to
€276 million ($306 million). Income from music operations fell 0.6
percent to €626 million ($694 million). Cash flow from UMG's operations
increased 33 percent to €567 million ($629 million).
and subscription services accounted for 24 percent of UMG's total
recorded music revenues in the second half of the year, double its share
in the first half of 2015. Downloads' share of revenue shrank to 18
percent from 24 percent. Physical product's share fell modestly to 38
percent from 42 percent. Licensing rise slightly to 17 percent from 16
Three-quarters of UMG's revenues came from 5 countries:
the U.S., the U.K., France, Germany and Japan. North America's share of
revenue grew to 42 percent from 39 percent. Europe shrank an equal
amount to 39 percent. Asia remained at 9 percent.
emerging "BRIC" markets of Brazil, Russia, India and China accounted
for just 3 percent of UMG's revenue. UMG believes emerging markets will
grow through global and local streaming services and more favorable
copyright laws in some countries.
Vivendi's revenue was €10.8
billion, up 1.4 percent. The company is facing a challenge in France
with falling subscriber counts to its bread-and-butter Canal+ cable
channels. Canal+ Group revenues fell to 454 million from 583 million as
the EBITA of Canal+ channels in France fell to -€264 million from -€188