Earnings Reports
Spotify, the world’s biggest music streaming platform, isn’t showing signs of slowing down. In the third quarter, revenue hit 3.99 billion euros ($4.32 billion) and subscribers grew by 6 million, the company announced Tuesday (Nov. 12).
The Swedish music streaming company has helped revolutionize how people listen to music but until recently, it didn’t have financial results to match its market power. Reacting to investors’ demands for both growth and profitability, last year Spotify tightened its belt and laid off about a quarter of its workforce, and this year’s quarterly financial results have shown marked improvements in margin and profitability without sacrificing all-important subscriber growth.
Although revenue was slightly below Spotify’s previous guidance of 4 billion euros ($4.4 billion), operating profit was a record high of 454 million euros ($500 million), exceeding guidance by 12%. After routinely posting operating losses in previous years, Spotify’s operating profit increased 70% from the second quarter and was up more than 14-fold from the prior-year quarter.
Trending on Billboard
Likewise, gross margin — revenue less cost of sales — reached 1.24 billion euros ($1.37 billion) and improved to 31.1% of revenue, up from 29.2%, 27.6% and 26.7% in the preceding three quarters. The margin improvement was attributed to gains from premium subscriptions as well as audiobooks and ad-supported gains.
Recent price increases in the U.S. and many other markets didn’t slow subscriber growth. Spotify finished the third quarter with 252 million subscribers, an increase of 6 million from the prior quarter and 11.5% higher than the prior-year period. Subscription revenue reached 3.51 billion euros ($3.86 billion), up 20.8% year-over-year. Premium average revenue per user increased 9% (at constant currency) to 4.71 euros ($5.18).
Advertising, a key ingredient to both Spotify’s freemium music model and podcasting business, continued to lag behind subscriptions. Advertising revenue of 472 million euros ($520 million) was up 5.6% from the second quarter and up 3.5% from the prior-year quarter. Music advertising was helped by growth in impressions sold and hampered by pricing weakness. Podcast advertising also suffered from pricing weakness and benefitted from growth in impressions sold.
The results sent Spotify’s share price price soaring in after-hours trading. Following the earnings release after markets closed, Spotify shares jumped over 9% to $459. Before trading closed, the stock hit an all-time high of $419.72 and posted its best-ever closing price of $419.48, up 2.3%. The stock closed above $400 for the first time on Friday (Nov. 8) and has gained 123% in 2024.
Concert promoter Live Nation turned its busiest summer concert season ever into an all-time financial haul. With the number of shows up 13% and fan attendance up 3%, adjusted operating income (AOI) reached a record $909.8 million, up 4% from the prior-year period, the company announced Monday (Nov. 11).
The third quarter benefitted from a heavy schedule in Live Nation’s owned and operated amphitheaters, which can generate ancillary income from food, beverage and parking. As a result, AOI increased even though revenue of $7.7 billion was 6% short of the $8.15 billion generated in the third quarter of 2023. Net income fell 13.4% to $451.8 million.
“We wrapped up our most active summer concert season ever, our show pipeline has never been bigger, and brand sponsorships are accelerating,” said CEO Michael Rapino in a statement.
Trending on Billboard
The concerts division had a record AOI of $474.1 million, up 39% year-over-year, on revenue of $6.58 billion, down 6%. Venue Nation, the venue operation division, saw a double-digit increase in on-site spending per fan at major festivals and a 9% increase in per-fan spending at amphitheaters. Live Nation hosted 112 million fans globally in the quarter, up 3%, which more than compensated for a 30% decline in stadium attendance.
The change in venue mix — fewer high-priced stadium tickets, more lower-priced amphitheater seats — caused Ticketmaster revenue to drop 17% to $693.7 million and AOI to fall 33% to $235.7 million. Sponsorship and advertising AOI grew 10% to $275 million on revenue of $390 million, up 6%. That revenue growth came mainly from a 20% increase in the number of strategic partners that generated more than $1 million of sponsorship and advertising revenue. The division added such brands as American Apparel, Wrangler, Ultra Beauty and American Eagle in Mexico to global festivals.
“As we look toward an even bigger 2025, we have a larger lineup of stadium, arena and amphitheater shows for fans to enjoy,” said Rapino. “Momentum continues to build, as we expand the industry’s infrastructure with music-focused venues to support artists and reach untapped fan demand across the globe.”
Ticket sales in September and October were up 20% year over year, and Live Nation has already sold more than 20 million tickets for concerts in 2025, a double-digit increase. Recent stadium ticket on-sales — including Coldplay, Rüfüs Du Sol and Shakira — saw double-digit growth in gross sales compared to past tours.
Venue Nation expects to host about 60 million fans in 2024, up 8% from 2023; it will benefit from VIP enhancements at Northwell at Jones Beach amphitheater in New York, Estadio GNP in Mexico City and others. At Northwell at Jones Beach, for example, season seat and box suite sales are up 50%, VIP club sales are up 50%, and per-fan food and beverage spending is up double-digits.
Following the announcement, which came after the markets closed on Monday, Live Nation shares rose 5% to $130.00 in after-hours trading.
French music streaming company Deezer’s revenue increased 11.0% (13.0% at constant currency) to 134.0 million euros ($147.3 million) in the third quarter, the company announced Wednesday.
That was slightly slower than the 15% growth rate in the second quarter and first quarter but ahead of the 7.4% revenue growth the company posted in calendar 2023.
Partnerships accounted for most of the quarter’s improvement by growing 21% to 41.5 million euros ($45.6 million). Deezer powers music streaming services for such companies as Germany’s RTL and Argentinian e-commerce company Mercado Libre. Through partnerships, Deezer offers its branded service to the likes of DAZN, a sports streaming platform, and Mexican mobile carrier WIM, whose customers get a 20% discount on Deezer Premium.
Trending on Billboard
Subscriber growth was helped by the conversion of “the first cohort of MeLi+ subscribers from trial accounts to premium accounts with higher margins,” said CEO Alexis Lanternier during Thursday’s earnings call. Also, Lanternier added, the Mercado Libre partnership, which provides 12-month trials, has produced results “higher than our initial expectations.”
Revenue from France was 78.5 million ($86.3 million) and 58.6% of total revenue, down from 59.4% in the prior-year period. The rest of the world generated revenue of 55.5 million euros ($61 million). The “other” category was 6.7 million euros ($7.4 million), up 63.8%, in part due to new verticals such as its wellness app, Zen.
The growth in France and contraction in the rest of the world is part of the plan, said CFO Carl de Place. “The strategy has been to improve the profitability and moving to positive profitability for Deezer, which has made us be more selective in the way we invest, in terms of marketing and making sure we invest in markets where we can see that the return on the investment is positive for for this. So that’s the reason why we are growing in France and over the rest of the world has been declining.”
Direct subscribers represent the majority of Deezer’s business but grew at a slower 4% to 85.8 million euros ($94.3 million). The number of direct subscribers rose 4.1% to 9.9 million; 5.2 million of them came from Deezer’s home market of France while the rest of the world produced 1.8 million subscribers, down from 2.0 million in the prior-year period. Deezer’s subscriber base took a hit because the company removed 400,000 “inactive family accounts,” but the company explained that the move had no impact on revenue and benefitted gross margin.
Despite the positive momentum in the quarter, the company chose to maintain its guidance from the previous quarter. Deezer forecasts 10% revenue growth in 2024 and expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to improve to a loss of 10 million euros ($10.9 million) and plans to have positive free cash flow.
Deezer was among the first music streaming platforms to raise prices in 2022 and did so again in 2023. There will be “potential for price increases” as Deezer continues to “upgrade the experience to add value to the user,” said de Place.
Following the release of third-quarter earnings after the market’s close on Wednesday, Deezer’s share price was practically unchanged, falling just 0.4% to 1.345 euros ($1.46) on Thursday. Year to date, Deezer’s stock price has fallen 36% from 2.095 euros ($2.27) per share.
Deezer’s third quarter financial metrics:
Revenue: up 11% to 134 million euros ($147.3 million)
Total subscribers: up 4.1% to 9.9 million
Direct subscribers: down 1.4% to 5.2 million
Partnership subscribers: up 11% to 4.7 million
Direct subscriber average revenue per user (ARPU): up 5.8% to 5.40 euros ($5.90)
Partnership subscriber ARPU: down 4.7% to 2.80 euros ($3.10)
BMG CEO Thomas Coesfeld says taking his company’s digital distribution in-house and operational changes — two initiatives launched during his first year at the helm — are paying off.
The Berlin-based music company reported on Wednesday (Aug. 28) that it generated 459 million euros ($491.7 million) in revenue in the first half of 2024, marking an 11.1% increase from the year-ago period thanks to strong growth in digital income streams. Digital revenue, which contributed nearly 70% of BMG’s overall revenue for the period, rose 20.3% in the first half 2024 compared to 2023, as BMG exited a contract with Warner Music Group (WMG) and moved oversight of its digital distribution business in-house.
“This move is paying off,” Coesfeld tells Billboard of taking control of BMG’s 80-billion stream digital business. BMG now has greater insight into its streaming data, which enables it to provide “better marketing insights, more timely campaigning and iterations of that campaign [and] better tools around fandom” to its artists, who include Jelly Roll, Kylie Minogue and Mustard, Coesfeld says. Also, BMG saves money not paying fees to WMG’s ADA.
Trending on Billboard
“One or two years ago we had this plan, we said this is what will happen,” Coesfeld adds. “And [these earnings] show it works.”
BMG’s first-half organic revenues grew by 12.5% while operating earnings before interest, taxes, depreciation and amortization (EBITDA) — a closely watched measure of growth — rose by 35.5% to 122 million euros ($130.7 million). EBITDA margin was 26.5%, up from 21.7% in the first six months of 2023. BMG’s catalogs again underpinned that margin figure, as the company acquired 10 catalogs during the first half of the year. Details of those deals were not disclosed.
The close of the first six months of 2024 coincided with the end of Coesfeld’s first year as CEO. After taking the reins of BMG from longtime CEO Hartwig Masuch on July 1, 2023, Coesfeld has set a tone that communicates BMG is open to change, even if it means taking advantage of artificial intelligence and collaboration with historic rivals.
“We figured only if we anticipate trends a little earlier do we have a chance to win in this very competitive market,” Coesfeld says. “We are looking at a fundamentally attractive market that is growing. It is driven by tech and if we adopt it and don’t fight it there is huge opportunity for BMG and artists.”
One example of this approach is BMG’s partnership with a generative AI lab at Munich’s Technical University, through which they have successfully launched a pilot program that uses gen-AI to market BMG’s deep catalog. Students at the lab generated short videos that have proven to be more cost efficient and effective at getting the audience to engage with the music.
Last fall, BMG also began a structural reorganization that included letting go of around 40 employees. It was a “tough period… but a business necessity” and part of a broader strategy meant to help the company respond quickly to industry trends, Coesfeld says.
“The operational changes, which we enacted — digital distribution, better able to monetize our repertoire and catalogs and our reorg, which is complete, is making us way more agile and faster in delivering our service and making decisions,” he adds. “We are much more agile on a day-to-day.”
Buoyed by its acquisition of See Tickets from Vivendi and strong festival performance, German concert promoter and ticketing company CTS Eventim saw its consolidated revenue jump 21% to 793.6 million euros ($854.4 million) in the second quarter of the year, the company announced Thursday (Aug. 22). Adjusted earnings before interest, taxes, depreciation and amortization fared even better, rising 23.3% to 110.0 million euros ($118.4 million).
The live entertainment division had revenue of 631.1 million euros ($679.5 million), up 19.7% from the prior-year period, and adjusted EBITDA of 36.6 million euros ($39.4 million), up 5.0%. Four of the top five events took place outside CTS Eventim’s home market: Bruce Springsteen in Spain; and Ultimo, Pinguini Tattici Nucleari and Max Pezzali in Italy. The company’s festival portfolio — which includes Rock am Ring, Rock im Park and Nova Rock — is “off to a good start” and advance ticket sales for upcoming festivals “suggest the upward trend is set to continue,” according to a press release.
Ticketing revenue rose 28.5% to 175.2 million euros ($188.6 million) while the division’s adjusted EBITDA climbed 29.5% to 156.6 million euros ($168.6 million). Notably, See Tickets has been included in CTS Eventim’s accounting since that deal was completed in June. Three out of the top five ticketed events, including concerts by Italian rapper Ultimo and South American reggae group Natiruts, took place outside of Germany.
Trending on Billboard
“Through See Tickets and its associated live entertainment activities, we have not only enhanced our market position in two of our focus markets — the UK and the US — but also expanded our team to include additional highly motivated and highly qualified units,” CEO Klaus-Peter Schulenberg said in a statement.
Based on the company’s performance in the first half of the year, the CTS Eventim executive board expects adjusted EBITDA “to grow significantly” in the latter half of 2024. The current quarter will get a boost from CTS Eventim’s role as an official ticketing partner for the recently concluded Paris 2024 Olympics and the Paralympic Games, which run from Aug. 28 to Sept. 8.
Following that optimistic guidance, shares of CTS Eventim rose as much as 10.6% before closing at 87.25 euros ($93.94), up 5.8%. The day’s improvement brought the stock’s year-to-date gain to 39.4%.
Looking further into the future, CTS Eventim is building a sustainable arena in Milan, Italy. Construction began in November and remains on schedule, according to the earnings release. Bidding for the naming rights and VIP suites will begin this fall.
The shine on the music industry, a darling of Wall Street in recent years, appears to have lost a bit of its luster.
Record label and publisher stocks that boomed in 2023 are mostly down in 2024. Universal Music Group (UMG), riding high until two weeks ago, is down 14.0% through Thursday (Aug. 15). Warner Music Group (WMG) is off 21.0%. Reservoir Media is up 2%, although it has declined 15.0% since July 26. K-pop companies have fallen off a cliff.
Not that business is bad — far from it. But as companies released earnings results over the last couple weeks, good results have occasionally been overshadowed by a financial metric — namely, subscription growth — that either missed expectations or is headed in the wrong direction. In some cases, the results were simply disappointing.
Ever since UMG produced weaker-than-expected subscription growth in the second quarter, analysts and investors have been revisiting their forecasts, wondering if they set their expectations too high and trying to figure out if UMG’s results reflect the broader market. The company’s recorded music subscription revenue rose 6.5% in the quarter, about half of analysts’ expectations.
Although UMG executives warned against reading too much into the results from any one quarter, investors did exactly that. UMG’s share price, which had been among the better performers in its label-publisher peer group in 2024, dropped 24% in a single day despite UMG posting a 10% increase in revenue and better margins than a year earlier.
Trending on Billboard
Subscription growth isn’t the only facet of the modern music business, but it’s probably the main reason most investors bought into music companies. As Billboard wrote in March, the music business is increasingly reliant — perhaps too much so — on subscription revenue. In the U.S. in 2023, subscription revenue accounted for 59.3% of recorded music revenue, up from 57.8% in 2022 and far above 47.3% in 2018, according to the RIAA. With ad-supported streaming stagnant, subscriptions take on even greater importance.
Subscription revenue was on everybody’s mind when WMG released earnings a week later. The company’s streaming revenue didn’t show signs of UMG’s slippage, though, which suggested the reaction to UMG’s quarter may have been overblown. WMG’s recorded music subscription revenue was up 7% while ad-supported streaming revenue was unchanged. The streaming market, said CEO Robert Kyncl during the Aug. 7 earnings call, is “diverse,” “healthy’ and has more room for subscriber growth. While analysts’ opinions varied, investors seemed happy enough, as WMG’s share price gained 2% that day.
Sony Music had similarly positive streaming results in its latest fiscal quarter. Total recorded music streaming revenue improved 6%, suggesting subscription revenue exceeded 6% to compensate for a small decline in ad-supported streaming.
Often overshadowed by UMG and WMG, Reservoir Media has delivered consistent growth since going public in 2021. The company’s latest earnings results delivered more of the same: Revenue was up 8% and operating income before depreciation and amortization jumped 27%. While there was a decline in recorded music revenue, it couldn’t be attributed to a stubborn streaming market. Rather, Reservoir was riding high a year earlier from the reissue of De La Soul’s catalog, which it picked up in the 2021 acquisition of Tommy Boy Music. Even so, its share price is down 11.9% since its quarterly earnings release while the S&P 500 is up 2% over the same period.
K-pop is a different story altogether. While these South Korean companies are riding the genre’s success to aggressively expand globally through partnerships, joint ventures and acquisitions, they’re showing signs of growing pains. Year-to-date through Aug. 15, the four main K-pop companies’ share prices had dropped an average of 35.5%.
Second-quarter results explain part of the decline. Three of those K-pop companies had an average decline in net income of 84%, while the fourth saw its net profit turn into a net loss. At JYP Entertainment, home to Stray Kids and iTZY, revenue dropped 37% and net profit plummeted 95%. SM Entertainment managed a 6% increase in consolidated revenue — the main SM Entertainment segment fared far better than its subsidiaries — but net profit still dropped by 70%. HYBE’s revenue increased 6% and set a quarterly record, but its net profit slipped 86%.
The South Korean companies’ relatively small rosters and lack of diversity help explain a quarter-to-quarter shortfall. JYP Entertainment, for example, was missing its most popular artists from its second-quarter album release schedule — a problem for a K-pop label dependent on fans’ tendency to buy CDs. (albums accounted for 49% of total revenue a year earlier). With an 82% drop last quarter, albums’ share of revenue fell to just 14%.
There’s plenty of opportunity for companies to regain their luster. UMG CFO Boyd Muir insisted the company will consistently deliver high single-digit revenue growth. WMG’s Kyncl insisted that “streaming dynamics remain healthy” and the company sees “plenty of headroom for subscriber growth” globally. K-pop labels won’t go two successive quarters without priority releases to pad sales figures. Any single quarter may have a hiccup, but the long-term trend lines are still pointing in the right direction.
After hosting residencies by Dead & Company and Phish, Sphere Entertainment Co. closed out its fiscal year ended June 30 with revenue of $273.4 million and a net loss of $46.6 million in the fourth quarter.
For full-year revenue, the company posted a $201-million net loss on revenue of $1.03 billion. That’s nearly double the $573.8 million revenue number in the prior year, when the Sphere venue in Las Vegas had revenue of just $2.6 million after launching late in 2023.
Following the earnings release, shares of Sphere Entertainment jumped 9.3% to $44.55 on Wednesday (Aug. 14).
Trending on Billboard
The MSG Networks division had quarterly revenue of $122.2 million, down 6.2% from the prior-year period, and annual revenue of $529.7 million, a 7% decline. MSG Networks operates two TV sports networks, MSG Network and MSG Sportsnet, and the MSG+ streaming platform.
The eye-grabbing $2.3-billion Sphere venue in Las Vegas reported revenue of $151.2 million in the latest quarter. Events such as concerts and corporate events accounted for revenue of $58.4 million. The Sphere Experience, an interactive experience combined with a showing of the film Postcard from Earth, had revenue of $74.5 million from 208 performances.
Sphere generated revenue of $489.4 million in its first three full quarters of operation. Though U2 opened its 40-date run at the end of the first fiscal quarter, the bulk of the concerts occurred in the second and third quarters. Four dates by Phish in April were followed by Dead & Co.’s 30-date residency that concluded Aug. 10.
With state-of-the-art visuals and audio, as well as the capacity to host multiple types of events, Sphere “has the potential to change the entertainment landscape for artists, guests and partners,” CEO James Dolan said during Wednesday’s earnings call. “Fully realizing that vision will take time, but we are learning every day how to optimize Sphere’s operating model.”
While its concerts have generated worldwide media attention and exposure on social media, Sphere’s financial potential depends on maximizing its utilization beyond that of a traditional venue. To that end, Dolan said the company is “making progress” toward its goal of hosting multiple events in a single day. The Sphere Experience, which includes the 50-minute film Postcard from Earth, ran on the same days as Dead & Company’s shows in July and August.
Sphere is also branching out into different types of events that take advantage of its Las Vegas location and an ability to offer dazzling visual displays on its 160,000-square-foot video screen. In June, the venue hosted its first corporate keynote event with Hewlett Packard Enterprise as well as the NHL Draft.
The content category, which includes Postcard from Earth, is another aspect of maximizing Sphere’s usage. Content generated more than $1 million in average daily ticket sales in the latest quarter, according to Dolan, and has earned more than $300 million in “high margin” revenue since debuting in October 2023.
“We are actively developing new cinematic experiences and expect to launch our next attraction in the coming weeks,” said Dolan. “We believe this expanding content library will benefit our Las Vegas business and strengthen our value proposition to new markets.”
The Eagles begin a 20-date residency at Sphere in September while Anyma will give the venue its first EDM shows in late December. Also in September, Sphere will host its first live sports event, UFC 306.
An absence of major artist activities caused revenue at K-pop company JYP Entertainment to fall 36.9% to 95.7 billion won ($69.8 million) from the same period a year ago, the company announced Tuesday (Aug. 13). Although JYP saw gains from global streaming, album sales declined 82% to 13.6 billion won ($9.9 million), and albums’ share […]
iHeartMedia’s business has been in steady decline since the beginning of 2023 but showed signs of improvement in the second quarter.
Total revenue rose 1% to $929 million, slightly above the company’s guidance, but was up just 0.1% excluding the impact of political advertising. A spike in expenses — namely operating and selling, general and administrative — contributed to a 21% decline in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
“We’re seeing sequential improvement in our revenue growth,” CEO Bob Pittman said during the earnings call on Thursday (Aug. 8). “While the marketplace continues to be dynamic — with a changing outlook on interest rates, inflation trends, global uncertainty and rapidly evolving domestic political landscape — we continue to see strong momentum in our podcast business, our digital ex-podcast business and the sequential improvement of our multi-platform groups’ year over year revenue performance.”
iHeartMedia’s digital audio segment contributed to the company’s revenue uptick. Podcast revenue improved 8.1% to $104.5 million, well below the previous quarter’s growth rates, while digital revenue excluding podcasts rose 10.3% to $181 million. Overall, digital audio revenue climbed 9.5% to $285.6 million.
The multi-platform segment fell 3.4% to $575.9 million. Broadcast radio, the company’s largest single source of revenue, declined 0.9% to $425.5 million. Networks fell 12.8% to $106.6 million. Sponsorship and events improved 2.4% to $39.1 million.
Trending on Billboard
Looking ahead, iHeartMedia expects third-quarter revenue to increase in the mid-single digits, which would be $991 million to $1.01 billion, and adjusted EBITDA to land between $200 million and $220 million, compared to $204 million in the prior-year period. For the full year, revenue is expected to increase in the mid-single digits, which equates to roughly $3.9 billion to $3.98 billion, and adjusted EBITDA will be between $760 million to $800 million, up 9% to 15% from 2023.
“As we look at the back half of the year, our results will reflect the continuing positive impact on an ad market recovery year material upside from political advertising, as well as the benefit of our ongoing focus on cost efficiencies,” said Pittman.
While iHeartMedia eked out a small improvement in the second quarter, two other radio companies that reported earnings in the last week continued their slides. Cumulus Media revenue fell 2.5% to $205 million as its net loss grew to $27.7 million from $1.1 million in the prior-year quarter. Townsquare Media revenue fell 2.5% and adjusted EBTDA dropped 8.3%.
Warner Music Group (WMG) reported strong quarterly profit growth on Wednesday (Aug. 7) thanks to lower costs and solid revenue gains from streaming subscriptions and digital — which helped offset a drop in physical revenue due to release timing and a difficult year-ago comparison, according to the company. All of that led to a boost in the company’s stock, which had risen nearly 2% by the end of trading on Wednesday (though some of those gains were shaved on Thursday).
“Our strong subscription streaming growth in [the third quarter] was driven by the performance of our music and healthy industry trends,” Warner Music Group chief executive Robert Kyncl said in a statement. He added, “Our commitment to long-term artist development, combined with a flatter structure in recorded music, will enable us to super-serve talent and set WMG up for sustained future growth.”
Trending on Billboard
Here’s what else you should know about the third-largest music company’s latest quarterly earnings call.
A positive note on the company’s strategic reorganization
Kyncl kicked off the call by thanking outgoing leaders Max Lousada and Julie Greenwald and welcoming incoming Atlantic Music Group CEO Elliot Grainge while providing more detail on how WMG’s recently announced global structure will work.
“We’re making changes from a position of strength, and I’m happy to say that we’re firing on all cylinders across new releases, catalog, distribution and publishing,” Kyncl said. Read more about his comments here.
Strong subscription growth across streamers
Overall streaming revenue was up 5% for WMG this quarter, with recorded music streaming revenue up 8.7% — reflecting growth in subscription revenue of 7%. That was welcome news to investors: Warner’s stock spiked around 6% earlier in the trading session on Wednesday before settling at a gain of nearly 2%.
On the call, Kyncl was asked about the sources of WMG’s subscription streaming revenue after other music companies reported less stellar growth on that metric this quarter. That included Universal Music Group (UMG), which saw a 24% drop in its share price after reporting that overall streaming revenue fell 4.2%, leading UMG executive vp of digital strategy Boyd Muir to suggest that streamers like Apple Music and Amazon Music are struggling to add new subscribers.
Kyncl said WMG’s revenue mix has remained largely the same and cautioned the financial community to resist viewing Spotify as a proxy for the music industry. “It’s much more diversified [than Spotify],” Kyncl said.
WMG’s subscription streaming revenue is projected to grow in the fourth quarter, with that growth remaining “consistent across our handful of top DSPs, certainly led by subscriber growth and … price,” said CFO Bryan Castellani.
In a nod to the music industry’s handwringing over Spotify’s bundling practice, Kyncl said in opening remarks that the labels and DSPs are not “adversaries playing a zero-sum game.”
“That’s simply not the case,” Kyncl said. “We’re actively engaged with our partners around ways to drive growth for all of us. Streaming dynamics remain healthy, with plenty of headroom for subscriber growth in both established and emerging markets across multiple partners. Also, price optimization and improvements in the royalty models will provide ongoing opportunities for additional growth.”
Celebrating Brat summer and the Benson boon
From the “pop sensation of the summer” — Kyncl’s description of Charli XCX’s album Brat — to Benson Boone, whom Kyncl called the “breakout star of the year,” the former YouTube exec appeared pleased with Warner’s recent and upcoming slate of music releases.
“So far in 2024, WMG has more new artists debuting on the Spotify Global Top 10 than any other music company,” Kyncl said, highlighting “homegrown successes” like Benson Boone, Teddy Swims and Artemas, the English-Cypriot singer-songwriter signed to 10K Projects.
Streaming’s catalog “halo effect“
When Twenty One Pilots released their latest album, Clancy, the band’s entire body of work benefitted, with streams more than doubling during the first week after the album’s release. That’s “the beauty of streaming,” Kyncl said on the call. “Newly released hits have a halo effect on the rest of an artists’ catalog.”
While loyal fan bases can drive an uptick in an artist’s catalog streams after a new hit’s release, Kyncl added that WMG can amplify and extend that halo effect, transforming hits into “evergreen, deep catalog.”