HILVERSUM, Netherlands (CelebrityAccess) — Universal Music Group announced the financial results for the third fiscal quarter of 2023, revealing that the recorded music industry is the place to be if you want to make money hand over fist.
According to UMG, revenue for the quarter €2,752 million, up by 3.3% year-over-year, or 9.9% in constant currency. Third quarter revenue was bolstered by the label group’s music publishing, which realized a €53 million benefit as streaming platforms caught up with royalty payments based on the Copyright Royalty Board Phonorecords III ruling from earlier this year. The results from Q3 2022 were also impacted by a previously disclosed €71 million payment from an internet service provider over a copyright infringement settlement.
Barring the impacts from both of those one-time events, overall revenue for UMG increased by 4.1% year-over-year, or 10.6% in constant currency.
Recorded Music revenues for the third quarter of 2023 were €2,037 million, down 1.1% compared to the third quarter of 2022, but UMG noted that revenues from the previous year were partially inflated by the copyright settlement and ongoing inflation. Excluding the settlement, revenue for the segment grew by 2.5% percent year-over-year and 13.0% in constant currency.
UMG attributed the revenue growth in recorded music to subscriber growth in the streaming market, as well as strong performance in the physical sales segment, where revenue was up by 11.4% year-over-year on strong vinyl sales in the U.S. and Europe.
Downloads and other revenue, such as ringtones, continued their long slow slide into history, falling by 56.9% year-over-year.
UMG also noted that revenue from licensing and other sources fell by 11.8% year-over-year
Music Publishing was a key component of UMG’s success in Q3 2023, generating €491 million in the third quarter of 2023, up 17.5% year-over-year, or 24.6% in constant currency. Excluding the revenue from the CRB Phonorecords III Accrual, the segment was still up by 4.8% year-over-year, or 11.2% in constant currency, UMG said.
Digital revenue was the primary source of revenue for UMG’s music publishing during the quarter, 25.6% year-over-year, including the CRB Phonorecords III Accrual. Performance revenue was up by 15.2% year-over-year, or 21.8% in constant currency.
However, sync revenue declined during Q3, falling by 3.5% year-over year (3.8% to the good when accounting for exchange rates and inflation.) Mechanical revenue remained stable from the previous year’s results, the company said.
“Our performance this quarter was marked not only by continued growth across our businesses but also by strong progress on our long-term strategy,” said UMG’s Chairman and CEO Sir Lucian Grainge. “We remain laser-focused on driving sustainable value creation for the company and its stakeholders: identifying and capitalizing on new revenue streams for UMG and our artists, responsibly advancing new technology, and expanding our global footprint.”
“For the ninth consecutive quarter as a stand-alone public company, we once again reported strong growth in revenue and Adjusted EBITDA. Even as we deliver current results, we continue to execute on the growth prospects that lie ahead for UMG,” added Boyd Muir, UMG’s EVP, CFO and President of Operations.
