UMG Revenues Up 3.5% Halfway Through 2020, Despite Pandemic Hit

The Weeknd
Pari Dukovic

The Weeknd

Universal Music Group’s revenues for the first half of 2020 were up 3.5% at constant currency and perimeter over the first half of 2019, to €3.46 billion ($4.09 billion), even as its quarterly revenue dipped slightly (down 4.7%) from Q1 2020 amid the coronavirus pandemic-caused lockdowns that took hold around the world.

For the first half of the year, recorded-music revenue reached €2.77 billion ($3.27 billion, up 3.7%), boosted once again primarily by a rise in streaming revenue (€1.81 billion/$2.14 billion, up 12.4%) that offset declines in physical sales (down 22.4%) and digital downloads (down 23.1%). For the first half of the year, the company pointed to new releases from The Weeknd, Justin Bieber, Eminem and Lil Baby, as well as the continued success of 2019 releases from Post Malone and Billie Eilish, which underlined much of that success.

And music publishing also increased substantially, up 21.2% in constant currency for the first half of 2020 over the same period last year, reaching €573 million in revenue ($678 million), with subscriptions the biggest driver there, as well as new signings like Taylor Swift, Kenny Chesney and Surfaces. But merchandising and other revenues fell precipitously, down 41.4% over the first half of 2019 to €121 million ($143 million), which the company chalked up to the near-total elimination of touring amid the pandemic, as well as other COVID-related declines in retail activity. EBITA, at €567 million ($671 million), was up 16.6%.

Quarterly, revenues dropped slightly from Q1 to Q2, the first period that occurred entirely within the pandemic’s grasp. Total UMG revenues hit €1.69 billion ($2 billion) in Q2, down 4.7% from €1.77 billion ($2.09 billion) in Q1, with recorded-music seeing a 4.5% decline due to slower subscription/streaming growth (up 8.5% for the quarter) and a 39% drop in physical sales revenue. But publishing revenues grew significantly, up 24.5% to €302 million ($357 million), even as merchandising and other revenue fell off a relative cliff, down 61.8% to €51 million ($60 million).

The company highlighted UMG’s new deal with Spotify, announced last week, as well as expansion in its international operations, as reasons for optimism. The planned IPO for UMG is still set for early 2023 at the latest.

Overall, UMG and its sister company Canal+ in France helped to offset Vivendi’s other losses, as revenues for the parent company reached €7.58 billion ($8.97 billion) for the first half of 2020, down just 2% year over year in constant currency and perimeter.