With streaming leading the charge, Universal Music Group enjoyed a 15.6 percent increase in revenue to €1.382 euros ($1.49 billion) for the second-quarter period ending June 30, 2017, the company announced Thursday. That’s up from from the €1.196 billion ($1.328 billion) the company produced in the first half of the corresponding period a year ago.
Within that, operating income increased by 47.8 percent to €170 million ($183.3 million) from €115 million ($127.7 million) in the second quarter of 2016. Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled €177 million ($190.8 million), an increase of 38.3 percent from the €128 million ($142.1 million) produced in the second quarter of last year.
With two solid quarters behind it this year, UMG’s half-year numbers also showed big improvements. In the first six months of 2017, revenue grew nearly 15 percent to €2.66 billion ($2.98 billion) from €2.315 billion ($2.57 billion); while operating income was €311 million ($335.3 million), a 43.3 percent increase over the €217 million ($240.9 million) garnered in the first half of 2016. Moreover, UMG’s EBITDA totaled €329 million ($354.7 million), a 36.5 percent increase from the €241 million ($267.5 million) gathered during that same period.
Of its total revenue, the recorded music operation generated €2.14 billion ($2.31 billion), a 16.9 percent (15.6 percent on a constant currency basis) increase over the €1.843 billion ($2.033 billion) that operation produced in the first half of 2016. Likewise, Universal Music Publishing Group (UMPG) jumped 10.8 percent to €400 million ($431.2 million) from €361 million ($400.7 million); but merch and other revenue sources stayed practically flat at €135 million ($145.5 million), versus €134 million ($148.7 million).
(Currency translations in this story use an average of one euro to $1.078 for 2017; and an average of $1.11 for 2016, as noted in their press release today and the one depicting last year’s mid-year numbers.)
The company said that its recorded music best sellers this year included new releases from Drake and Kendrick Lamar, the 50th Anniversary edition of the Beatles’ Sgt. Pepper’s Lonely Hearts Club Band, as well as carryover sales from The Weeknd and soundtrack releases from the movies Moana and La La Land.
On a song basis, the company noted the success of Luis Fonsi’s “Despacito,” featuring Daddy Yankee and Justin Bieber, which has become the most-streamed song of all time with over five billion streams across all streaming platforms.
Breaking out recorded music at the six-month mark, digital totaled €1.315 billion ($1.417 billion) a 27.1 percent increase over the €1.04 billion ($1.148 billion). Digital splits into €962 million ($1.037 billion) from streaming and €353 million ($380.5 million), versus €653 million ($724.8 million) for streaming last year in the corresponding period; and €382 million ($424 million). That means that downloads fell 10.3 percent, while streaming was up a whopping 47.3 percent. Finally, licensing and other revenue totaled €342 million ($368.7 million), up 10.7 percent from the €309 million ($343 million) tallied in the first half of 2016.
As a percentage of recorded music revenue, streaming accounted for 45 percent of revenue, up from 35.64 percent last year, while physical was 22.6 percent, down from 26.64 percent; downloads was 16.5 percent, down from 20.85 percent; and merch and other was 16 percent, down from 16.9 percent.
Breaking out the recorded music operation another way, this time by territory, North America grew by 27.6% to 1.023 euros ($1.1 billion) from 802 million euros ($890 million), while Europe was up 2.14% to 674 million euros ($726.6 million) from 659 million euros ($731.5 million); Asia grew by 21.4% to 278 million euros ($300 million) from 229 million euros ($254.2 million); Latin America grew by 21% to 75 million euros ($80.9 million) from 62 million euros ($69 million) while the rest of the world grew by 13.8% to 91 million euros ($98.1 million) from 80 million euros ($88.8 million).
As a percentage of recorded music revenues, this year North America accounted for 47.8%, versus 43.8% in the first six months of 2016; Europe fell to 31.5% from 26%; Asia grew to 13% from 12.5%; and Latin America grew slightly to 3.5% from 3.4%; while the rest of the territories, which accounted for 4.25% of revenue, down from 4.4%.