Universal Music Group has reported its financial results for Q3 of 2022.
Revenue of €2.66 billion represented a 13.3% year-on-year increase driven by growth across all segments. All results are stated on a constant currency basis.
In the nine months to September 30, 2022, UMG’s revenues increased by 15.6% to €7.4bn. Recorded music revenue for the nine months was up 10.1% to €5.7bn, while music publishing revenue increased by 28.2% over the same period to €1.27bn. When a change to society accounting is factored in then publishing growth was 15.8%.
Recorded Music revenue in Q3 grew by 10.1% year-on-year to €2.06bn, while music publishing revenue increased by 6.9% to €418m.
A significant result was in Merchandising and Other revenue: up 101.1% year-on-year to €189m. Touring-related merch revenue rebounded following a Covid related slowdown in live touring in the prior year. The increase was an advance on the prior quarter’s year-on-year growth of 65.9%.
Adjusted EBITDA increased 9.1% year-on-year to €553m, driven by the revenue growth.
Top sellers for the quarter included BTS, Blackpink (pictured), Ado, INI and Morgan Wallen.
Within recorded music, subscription and streaming revenue grew 7.7% year-on-year to €1.35bn; for the nine months, subscription and streaming revenue was up 10.3% to €3.88bn.
Subscription revenue alone was up 8.7%, driven by the continued growth in premium streaming users. Ad-supported streaming revenue grew 5.2%, reflecting ongoing improvement in ad-based monetisation, despite what UMG identified as “industry-wide ad-market pressure as a result of the uncertain macroeconomic environment”.
Physical revenue declined 9.6% in Q3, partly due to a difficult comparison against strong physical sellers in the prior-year quarter. However, sales for the year to date were up 4.6%, driven by strong vinyl demand as well as continued CD sales, particularly from BTS and King & Prince.
License and Other revenue improved 30.2% in Q3, thanks to the strong recovery in live touring, where the major participates in certain markets.
“More than ever, we are delivering a diverse and growing range of business and creative opportunities to our recording artists and songwriters,” said Sir Lucian Grainge, UMG’s chairman and CEO. “Through our innovation, global reach, and unique understanding of the evolution of the market, we are continually improving the monetisation of music and music-related content, generating high-quality revenue and recurring income from more sources than ever before.”
Boyd Muir, UMG’s EVP, CFO and president of operations, said: “Our vision of success is about maximising the long-term value of the business. That requires not only growing revenues but also growing a broad diversity of revenue streams that help drive greater absolute EBITDA and greater value for shareholders.”