In its first post-IPO earnings report, Universal Music Group posted 17.4% year-over-year revenue growth in the third quarter of 2021, with recorded music subscription and streaming revenue up 15.2% and adjusted EBITDA up 20.7%.
Lucian Grainge, UMG’s Chairman and CEO, said, “Our operational and financial performance this quarter – our first as an independent, publicly traded company – demonstrates both why UMG is the world’s most successful music company, as well as how our commitment to artists’ career development and fostering innovation promotes growth across the music ecosystem.”
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Revenue for the third quarter of 2021 was €2,153 billion (around $2.49 billion), up 16.1% compared to the third quarter of 2020, and up 17.4% in constant currency, according to the report. EBITDA for the quarter grew 12.1% year-over-year to €426 million (around $495 million), driven by the revenue growth. EBITDA margin was 19.8%, compared to 20.5% in the third quarter of 2020.
Top sellers for the quarter included new releases from Billie Eilish, King & Prince and Drake, as well as continued sales of BTS and Olivia Rodrigo.
Recorded music revenue for the third quarter of 2021 was €1.711 billion ($1.97 billion), up 15.5% compared to the third quarter of 2020, and up 16.9% in constant currency. Subscription and streaming revenue grew 14.0%, or 15.2% in constant currency, with strong growth in both subscription and ad-supported streaming revenues. Physical revenue grew 8.9%, or 11.6% in constant currency, driven by strong vinyl demand as well as growth in direct-to-consumer sales. Other digital revenue fell 4.7%, or 3.5% in constant currency, as the global decline in downloads continues. License and other revenue improved 49.3%, both as reported and in constant currency, as a result of improvements in broadcast and neighboring rights collections, audio-visual production income and synchronization, live and brand deals, according to the report.
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Music publishing revenue amounted to €363 million ($421.5 million) in the third quarter of 2021, up 19.8% year-over-year, or 21.4% in constant currency. Revenues benefited from the continued growth in subscription and streaming, the timing of certain society distributions and from an improvement in synchronization. While performance revenue experienced the delayed impact of last year’s COVID-related slowdown, this was more than offset by revenue from catalogue acquisitions, the report states
Merchandising and other revenue grew to €84 million, up 13.5%, both as reported and in constant currency, as retail revenues grew and touring-related merchandising revenue began to rebound.
“Our results this quarter demonstrate the continued strength of our artist roster and catalogue, the increasingly diversified revenue streams of our business, and our ability to deliver growth for our shareholders,” said UMG CFO and President of Operations Boyd Muir.
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