Universal Music Group CEO Lucian Grainge sees future growth for his own major music label and others coming from new partnerships with top streaming platforms.
Talking to Wall Street analysts after the release of UMG’s fourth quarter results, Grainge said the years of the music industry being hobbled by piracy and copyright and IP ownership abuses had been replaced by partnerships with global music streaming platforms like Amazon, Apple and Spotify.
“Where they go, we go with them, hand in hand, investing in local talent,” Grainge told analysts during a conference call. The UMG boss welcomed new multi-year licensing deals with Spotify and Amazon Music. “These agreements provide for new paid subscription tiers, the bundling of music and non-music content and a richer audio and visual content catalog that will benefit artists, songwriters, platforms and consumers alike.”
The deals are part of UMG’s Streaming 2.0 plan, the music label’s strategy to boost music streaming revenues through subscriptions and exclusive content. They also aim at working together to tackle unlawful AI-generated content and other infringements of copyright and IP ownership.
During the fourth quarter to Dec. 31, 2024, UMG saw overall revenue rise 7.2 percent to €3.4 billion (US$3.68 billion), while adjusted EBITIDA rose 18 percent to €799 million (US$862.4 million) year over year. Recorded music revenue rose 6 percent to €2.56 (US$2.76 billion) during the fourth quarter.
In that category, subscription and streaming revenue grew 4.6 percent for the quarter to €1.6 billion (US$1.79 billion. Streaming revenue fell 5.1 percent year-over-year, as music demand continues to shift from better monetized video streaming platforms to short-form platforms.
“While this creates an opportunity for the medium term as short form video monetization by the platforms improves … we expected continued near term pressure on this revenue line,” Boyd Muir, COO and CFO of UMG, told analysts.
During the call, UMG execs faced a host of questions about how they would ensure future revenue growth, given the major label’s increasing reliance on music streaming platforms in a range of geographical markets with unique audiences and content offerings.
“It’s the stickiness of our music and our libraries and our catalog and our global reach, which is why we’re able to actually build the ecosystem,” Grainge argued. Michael Nash, executive vp and chief digital officer, talked about product bundling and taking advantage of interactive technology like Amazon’s Alexa to boost overall revenues.
“There’s a continuing way of innovation that we’ve seen really transforms our business and transforms the digital landscapes, in particular, over the last decade, and we anticipate that’s going to continue as the market grows,” Nash argued.
Original Source: Read More Here
