The world’s largest music company Universal Music Group NV’s second-quarter revenue beat estimates, lifted by growth in recorded music and merchandising.
Revenue rose 6.4% to €2.70 billion ($3 billion) in the period, the Hilversum, Netherlands-based company said on Wednesday. Analysts surveyed by Bloomberg expected revenue of €2.56 billion.
A growth in global subscribers and price increases across some platforms drove a 10.6% increase in subscription revenue in the quarter, the record label for artists such as Taylor Swift and Drake said. Streaming revenue, also a part of the recorded music segment, grew 2.9%, the company said.
While music streaming has boosted the industry’s growth, some argue that the way artists and their record labels are paid has not meaningfully evolved. Chief Executive Officer Lucian Grainge has said there is a “pressing need” to reimagine the streaming model in order to appropriately reward those artists whose music drives fans to engage. It partnered with the music streaming platforms Tidal and Deezer SA this year to explore a so-called “artist-centric model,” and to research how to accelerate subscriber growth, deepen retention and better monetize fandom.
At the same time, Universal Music has been rallying against the rise of artificial intelligence-generated music. It has said the training of generative AI using music created by its artists represents a breach of its agreements and a violation of copyright law.
During the quarter, Universal Music increased its presence in the Thai market by agreeing to acquire RS Group’s music catalog, which represents the work of more than 960 artists.
King & Prince, Morgan Wallen, SEVENTEEN and Swift were among the recorded music top sellers in the second quarter. Growth in direct-to-consumer sales boosted merchandising revenue, even as it faced lower touring activity in the quarter, the company said.
