Services like Spotify, Pandora and YouTube accounted for 51 percent of digital revenue in the third quarter.
The world's largest record label has crossed a key threshold. Streaming royalties accounted for 51 percent of Universal Music Group's digital recorded music revenue in the third quarter, according to Tuesday's earnings release by parent company Vivendi.
Streaming revenue is currently humming along at a nearly €1 billion run rate for UMG. Digital revenue in the third quarter was €450 million. At 51 percent of digital revenue, streaming revenue in the quarter was €230 million. At 19 percent of total revenue and 25 percent of recorded music revenue in the quarter, streaming is now a significant part of UMG's overall business.
Surpassing the 50 percent mark, achieved by Warner Music Group in the quarter ended March 31, comes at a critical time for the record industry. UMG has become an opponent of unlimited and free on-demand music from Spotify and is pressing for changes to the business model. It prefers the royalties of paid-only services like Apple Music, which quickly amassed 6.5 million global subscribers, and the recent launch of YouTube Red, a subscription service to complement the free, ad-supported YouTube. Elsewhere in the streaming marketplace, UMG has argued for a significant rate increase for the rates to be paid by Pandora and other statutory webcasters from 2016 to 2020.