Universal Music Group’s 2016 performance shows incredible growth with it’s best fiscal performance ever despite dropping physical and download sales – thanks to streaming.
Vivendi, who took 100% ownership of Universal Music Group in 2006, just posted record performance for UMG in 2016 showing record performance for the major record label. Universal’s total revenues rose by $176 million from 2015, rising by 3.1% from $5.65 billion in 2015 to $5.83 billion last year.
Perhaps the most notable part of the report shows that Universal Music Group’s income was dominated by music streaming , beating physical sales (CDs, vinyl, etc.) for the first time in history. Whilst reduced physical sales played a part it was largely thanks to the massive increase in music streaming’s popularity in recent years. UMG’s streaming margin is also testament to the ability of the new music platform, as many have railed against it in the past criticising it’s payouts.
The rise in streaming revenues is thanks largely to the increase in popularity of the major streamers last year like Spotify and Apple Music. Streaming revenues for UMG grew by an incredible 55% from 2015 to 2016, rising from $1.06 billion to $1.483 billion at the end of last year. That equates to roughly $4.5 million a day.
The enormous rise in popularity for music streaming in 2016 saw streaming take a major majority in UMG’s recorded music revenues, making up 48.2% their total music revenues. This is a phenomenal rise from the end of 2015 when music streaming made up just 28.2% of the total revenue.
Physical sales for UMG meanwhile continued to fall with a 13.1% drop from $1.36 billion in 2015 down to $1.56 billion by the end of 2016. Digital downloads also saw a drop in revenues from $1.13 billion to $835 million last year.