The huge growth in streaming and subscription services again helped Universal Music Group offset steep declines in physical and download sales during 2016.
Under Vivendi ownership, UMG posted their best financial performance thus far. UMG’s overall revenues rose to $5.57 billion, which is 4.4% more than 2015’s $5.41 billion.
The label group's earnings before interest, taxes, and amortization (EBITA) amounted to $681 million, up 9.1% at constant currency compared to 2015. ("Constant currency" is a measure that eliminates foreign currency fluctuations - like the British pound following Brexit - which can impact earnings reported in a single currency.)
Per the company’s numbers, 2016 streaming figures equated to $137 million a month, which is 58% more compared to 2015. By week, the company makes $32 million, and per day, it earns $4.5 million. Album sales saw a 15% drop, while download sales also saw a 29% decline. Downloads include the iTunes-standard mp3 format as well as other formats like ringtones.
Other interesting numbers from UMG's financial disclosure represents the operating income, recorded music and merchandise.
UMG’s operating income grew 10%. The mega-label attributed the rise in operating income to album popularity from artists like Drake, Rihanna, and Ariana Grande. Carryover sales from Justin Bieber also boosted sales.
Recorded music revenues also rose to $4.63 billion, up 1.8% over the previous year’s $4.55 billion. Of course, recorded music revenue from Spotify and Apple Music also saw a solid increase, from 2015’s $1.06 billion to $1.64 billion, a 55.5% jump.
Revenue in merchandising also saw strong growth. It grew 16.1% thanks to “stronger touring activity” from its artists. Income from music operations also jumped 10.7% from 2015, totaling $726.9 million.
In terms of percentages, streaming accounted for 35.4% of revenue, physical 29.3%, downloads, 18% and licensing 17.3% in 2016 as compared with 2015 when streaming was 23.2%, downloads was 24.8%, physical was the leader at 34.9%; and licensing and other revenue at 17%.
Other information provided in the disclosure include Vivendi’s ownership in Vevo increasing to 49.4% at the end of 2016 from 48.7% in 2015; and that future royalties to artists and songwriters totaled $2.09 billion, versus $1.95 billion at the end of 2015.