Universal Music Group has reported its financial results for the year ending December 31, 2022.
Total revenue increased 21.6% year-on-year (13.6% in constant currency) to €10.34 billion. The results were driven by strong growth across all segments
Music publishing revenue soared by 34.8% (26.3% in constant currency) to €1.8bn. The performance was partly explained by catalogue acquisitions made in prior years, which include the huge Bob Dylan deal in 2020. In the same year, Universal inked a publishing agreement with Taylor Swift, who’s since done blockbuster business with multiple albums including Midnights. Recent catalogue deals include Sting and Neil Diamond.
Publishing also benefited from continued organic growth in subscription and streaming revenue, as well as post-Covid recovery in synchronisation and performance revenue. Even excluding the impact of a change in society accounting, music publishing revenue grew 18.3% in constant currency.
Recorded music subscription revenue grew 18.4% year-on-year, or 10.0% in constant currency, to €3.29bn. Streaming revenue (not including subscription streaming) grew 19.7%, or 9.3% in constant currency, to €1.19bn.
During 2022 physical revenue grew 7.7% year-on-year, or 4.1% in constant currency, to €1.21bn. In a sign that Q4 is no longer as important for music sales, the major’s physical growth during that three months (up 3.1% in constant currency to €404 million) was below its 2022 performance.
Overall recorded music revenue for Q4 was €2.235bn, up 5.6% year-on-year in constant currency. Q4 subscription revenue grew 11.4% in constant currency, driven by the growth in global subscribers. Streaming revenue was up just 1.8% in constant currency, as the advertising industry continued to be impacted by a difficult economic environment.
Total UMG Q4 revenue of €2.94 billion was up 8.8% in constant currency, driven by growth across all segments, and particular strength in music publishing (up 22.1% in constant currency during the quarter).
We continue to successfully manage the company for long-term growth while driving strong results in our core business
Sir Lucian Grainge
Top sellers for the year included Taylor Swift, BTS, Encanto OST, Olivia Rodrigo, Morgan Wallen and The Beatles. Swift won IFPI’s Global Recording Artist Of The Year Award.
Global artist success across platforms for the major include four of the Top 5 and 15 of the Top 20 IFPI Global Artists of the Year; four of the Top 5 global artists on Spotify; seven of the Top 10 albums in the US; and six of the Top 10 artists in the UK based on OCC data.
“Today’s report demonstrates that, once again, we continue to successfully manage the company for long-term growth while driving strong results in our core business - developing great artists and introducing their music to fans around the world,” said Sir Lucian Grainge, UMG’s Chairman and CEO. “Our roster - which features four of the top five, and 15 of the Top 20 IFPI Global Artists of the Year - once again achieved enormous commercial and creative success in markets around the world. We also worked to evolve and expand relationships with our existing DSP partners as well as establish new ones in fitness, health, gaming and the metaverse, driving the industry forward through leadership, creativity, innovation and collaboration.”
UMG highlighted evolving and expanding relationships with long-term partners including Amazon (Twitch), Meta (revenue sharing) and Apple (spatial audio), as well the use of technology to drive new opportunities for catalogue artists. Examples include the ABBA Voyage digital avatar concert, Elton John’s Beyond The Yellow Brick Road experience on Roblox and The Beatles' Revolver spatial audio release.
Adjusted EBITDA of €2.13bn represented an increase of 11.7% in constant currency.
Boyd Muir, EVP, CFO and president of operations for UMG, said: “2022 has been another year of sustained growth at UMG, with particularly robust growth in free cash flow, even as we continue to opportunistically and selectively invest in artists and catalogues that will be additive to the long-term health of our business. We saw revenue growth of 14% in constant currency, adjusted EBITDA growth of 12% in constant currency and free cash flow growth of 70%, positioning us well for 2023, as we continue to work towards our mid-term targets.”