Universal Music CEO calls for new streaming model after strong fourth quarter

Universal Music Group, the world’s largest record label, said quarterly music streaming revenue topped 1 billion euros ($1.06 billion) for the first time in the fourth quarter, highlighting its continued importance to the music business.

While Universal Music Chairman and CEO Lucian Grange praised the steady growth of streaming and technology’s ability to connect artists with their fans, he used the company’s call to investors in the fourth quarter on Thursday to advocate for a new economic model.

“Streaming has evolved in a way that underestimates the critical contributions of many artists as well as the participation of many fans,” Grange said, adding that the company is working with its partners on new models to ensure streaming continues to grow and artists are fairly rewarded. .

Universal Music signed a new deal with music service Tidal in January, and Grange said the label is in talks with other major global platforms, including releasing short videos, a clear nod to TikTok.

Universal Music Group digital director Michael Nash declined to comment on talks with “any specific partner”.

The company said its top-selling releases for the quarter were “Midnights” by Drake, Seventeen and Taylor Swift, which made history by taking all of the top 10 spots on the Billboard Hot 100 list.

Adjusted profit before tax, or EBITDA, was €620 million, compared to €568 million in the fourth quarter of 2021. According to Refinitiv, analysts had forecast EBITDA at 621.25 million euros.

Revenue rose 16.7% to €2.94 billion, with streaming revenue up 13.3% year-over-year. This compares with analysts’ forecasts of 2.87 billion euros.

Subscription and streaming revenues, which account for more than half of Universal Music’s recorded music revenue, grew 18.5% year-over-year to €1.44 billion.

Music Publishing’s revenue was 530 million euros, almost 30% more than a year ago.

The label’s trade business generated €181 million, up 28% from a year earlier. This reflects the return of concert tours after a period in which the COVID-19 pandemic forced them to be cancelled.