UMG: Streaming, Subscription Services Boost 2015 Bottom Line

UMG: Upbeat Earnings

UNIVERSAL MUSIC GROUP eked out a profit in its year-end 2015 financial report, largely thanks to the dominance of streaming and paid subscription services, offsetting the continuing decline in physical sales and downloads.

Streaming and subscription services accounted for 52% of the company's digital recorded music revenues in the second half of the year as part of the financial report released by parent company VIVENDI.

UMG's total 2015 revenues were $5.66 billion, up 2.7% at constant currency, while revenue was up 12.1 %. The 43% growth in subscription and ad-supported streaming revenues was enough to offset declines in physical products and digital downloads.

Recorded music revenues were up 2.4% to $4.56 billion, while music publishing revenues rose 3% to $839 million. Revenue at the "Merchandising and other" category grew 3.5% to $306 million. Income from music operations fell 0.6% to $694 million). Cash flow from UMG's operations increased 33% to $629 million.

Streaming and subscription services accounted for 24% of UMG's total recorded music revenues in the second half of the year, double its share in the first half of 2015. Downloads' share of revenue shrank to 18% from 24%. Physical product's share fell  to 38% from 42%. Licensing ticked up a percentge point to 17%.

Three-quarters of UMG's revenues came from five countries: the U.S., the U.K., FRANCE, GERMANY and JAPAN. NORTH AMERICA's share of revenue grew to 42%  from 39%. EUROPE shrank an equal amount to 39%, while ASIA remained at 9%.  "Emerging markets" BRAZIL, RUSSIA, INDIA and CHINA accounted for just 3% of UMG's revenue.

VIVENDI's revenue was €10.8 billion, up 1.4%.

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