2 days Ago By Joe Gallop
Universal Music Group (UMG) has posted stronger-than-expected revenue growth for the fourth quarter of 2024, defying industry concerns over a slowdown in music streaming. The world’s largest record label reported total revenue of €3.44 billion (A$5.
7 billion), up 7.9% at constant currency, surpassing analysts’ projections of €3.27 billion.
Revenue from subscriptions and streaming grew 5.6% to €1.60 billion (A$2.
64 billion), exceeding analysts’ expectations of 4.1% growth. However the growth rate slowed from the previous quarter’s 6.
2%, Subscription revenue alone saw a 9% increase, reaching €1.23 billion (A$2.03 billion), fuelled by a rise in paid subscribers.
However, ad-supported streaming revenue fell by 4.1% to €375 million (A$619 million) as listeners continue shifting from premium video platforms to short-form content services that are less monetised. Universal is banking on its ‘Streaming 2.
0’ strategy, which aims to convert ad-supported users into premium subscribers to maximise revenue. The company is also exploring new opportunities in fan engagement, merchandising and branding to drive further growth. In addition to streaming, Universal saw a 3.
4% increase in physical sales – including CDs and vinyl – reaching €458 million (A$751 million). EBITDA rose to €799 million (A$1.31 billion), beating analysts’ forecasts of €721.
4 million and generating a 23.2% profit margin. For the full year, Universal reported a net profit of €2.
09 billion (A$3.43 billion), compared to €1.26 billion (A$2.
07 billion) in 2023. Universal is aiming for annual revenue growth of more than 7% through 2028. The company recently expanded its partnership with Amazon Music to boost artist support and curb AI-generated content, while also signing a multi-year distribution deal with Spotify that includes new pricing tiers.
Additionally, Universal is preparing for a U.S. share sale by September 15, fulfilling an agreement with billionaire investor Bill Ackman’s Pershing Square, which plans to sell $500 million (A$820 million) worth of shares in the company.
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