State Champ Radio earnings
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Annual revenues for French music company Believe grew 31.8% to 760.8 million euros ($723.5 million) in 2022 as the company capitalized on investments and expansion in Europe, India and China. Digital sales accounted for 92% of Believe’s revenue while non-digital sources represented just 8%.
The company’s premium solutions segment grew 31.6% to 712.6 million euros ($677.7 million). Automated solutions, which includes the TuneCore distribution platform, improved 34.5% to 48.2 million euros ($45.8 million). TuneCore’s launch of an “unlimited pricing” plan in 2022, which allows artists to distribute an unlimited amount of music for a fixed annual fee, was “extremely successful and translated into an acceleration of growth,” CEO Denis Ladegaillerie said during Wednesday’s earnings call.
“We ended 2022 strongly delivering above our IPO commitments both operationally and financially for the second year in a row,” Ladegaillerie said in a statement. “In 2022, as we have done each year since 2005, we did what we said we would do … or better. We grew our market share; we improved profitability; we generated significant cash flow from our operations.” Free cash flow was 52 million euros ($49.5 million), an improvement from negative 30.7 million euros in 2021.
Believe also revealed that it invested in French pop label Structure, which it called “a new French pop label partnering with two successful producers, behind the recent success of several multi-platinum French pop artists.” It additionally noted an investment in Madizin Music, “a German well-known brand managed by two renowned producers, composers, and entrepreneurs,” as well as an exclusive partnership with Panorama Music, a new Indian label founded by a Bollywood film producer.
Digital revenues improved 34.7% organically as Believe served an additional 200,000 artists, to 1.3 million, either directly or through record labels. In France, Believe was the second-largest music company in digital local repertoire in 2022. Believe was the third-largest recorded music company in Germany “on local repertoire in the streaming market,” and the market’s second-largest company in hip-hop. The company pointed to the chart success of TuneCore artist Theo Junior and Milky Chance, who amassed 1.2 billion streams in 2022 on the strength of the track “Stolen Dance.”
In Asia, Believe has invested in India and Southeast Asia and now has about 80 people spread throughout five offices in China. “The level of activity remained sustained throughout the year as the digital monetization increased in Greater China, which led to the signings in Premium Solutions of more than 300 labels and above 250 artists directly,” the company said.
Looking forward to 2023, Believe expects to post organic revenue growth of 18%, improve its adjusted EBITDA margin to between 5% and 7% and again be cash flow positive. “In 2023, we will continue our profitable growth strategy: invest in our teams to grow market share, innovate in audience development products for our artists and labels, and further drive operational efficiencies through technology and scale to increase profitability,” said Ladegaillerie.
Abu Dhabi-based music streaming company Anghami says its revenues grew by more than 35% to $48 million in 2022, driven by strong growth in paid subscribers, according to a statement the company released sharing its preliminary unaudited results for last year.
The company says its total number of paying subscribers grew 21% year-over-year to 1.52 million, while the overall number of music streams rose by 20% amid growing demand for Anghami’s music content, roughly 60% of which was Arabic-language in 2022.
“Our ability to provide an exceptional user experience and to deliver the best music and entertainment content in the (Middle East and North Africa) region and beyond is reflected in our strong financial performance in 2022,” Anghami CEO Eddy Maroun said in a statement.
As the most popular streaming platform in one of the fastest-growing streaming markets in the world, Anghami says it will achieve profitability later this year. But the company has faced its first public growing pains in recent months in the form of a lawsuit and regulatory reprimand.
In December, U.S.-based publishing company Reservoir Media and its Middle East partner PopArabia sued Anghami for alleged copyright infringement related to a dozen Western and Arabic songs by artists including Lil Jon and 50 Cent. Anghami has defended its payments to rights holders and called the lawsuit baseless and defamatory.
In January, the Nasdaq market exchange, where Anghami is publicly traded, notified the company that it was in violation of a filing rule requiring Anghami to submit a balance sheet and income statement to support its interim results for the second quarter ending June 30, 2022. The company had only submitted a press release with financial results for the period.
The regulatory flag did not affect Anghami’s listing or ability to trade on the exchange, and Anghami apparently remedied the issue this month by filing unaudited condensed financial statements for the first half of 2022 and 2021.
However, in a Feb. 27 filing, Anghami noted that its independent auditor, Ernst & Young Middle East, resigned this year and has been replaced by Grant Thornton. Ernst & Young audited Anghami’s financials for 2021 and 2022 without issue, but did include paragraphs in each of the year’s reports “regarding substantial doubt about Anghami’s ability to continue as a going concern,” Anghami said in the filing.
Grant Thornton is expected to release an audited version of the company’s full-year 2022 results by mid-April.
Even as the U.S. advertising market’s slowdown stunted iHeartMedia’s post-pandemic recovery, the company posted record revenue of $3.9 billion in 2022, up 9.9% from 2021, the company announced on Tuesday (Feb. 28).
“The macro economic conditions are certainly impacting the entire advertising marketplace,” CEO Bob Pittman said during Tuesday’s earnings call. “Even the podcasting industry is not immune to some effects of the advertising slowdown.”
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $950.3 million, up 17.2% year over year. That’s the second-best adjusted EBITDA in the company’s history following 2019 when the company hit $1 billion. Annual free cash flow of $259 million was also the second-best in history after reaching $400 million in 2019.
Podcasts, the company’s fast-growing segment, generated revenue of $358.4 million in 2022, up 41.9% from the prior year. The high-growth podcasting business could benefit from what Pittman called “a transition toward more rational behaviors” in spending. Pittman didn’t point to any specific company, but an era of big spending on podcast content deals appears to be over at Spotify, where chief content officer Dawn Ostroff recently left the company and the head of audio talk shows and partnerships, Max Cutler, also departed. “I think there were people who thought they were buying [market] share, but were really buying losses,” he said.
Digital revenue other than podcasts improved 14% to $663.4 million. Broadcast radio, by far iHeartMedia’s biggest revenue source, grew 4.1% to $1.89 billion. Network revenue was flat at $503.2 million. Revenue from sponsorships and events climbed 17.9% to $189 million. Revenue from the audio and media services group jumped 22.7% to $304.3 million.
In the fourth quarter, iHeartMedia’s revenue grew 6% year over year to $1.13 billion, the high end of guidance of 2% to 6%. Adjusted EBITDA was $316 million, in the middle of its guidance range of $305 million to $325 million. Both revenue and adjusted EBITDA hit record highs for any quarter in the company’s history.
Although the company started 2022 strong, “increased volatility and uncertainty” moderated annual results, Pittman said. Some of that slowdown was “self-inflicted,” he admitted. During the fourth quarter, iHeartMedia put greater emphasis on “sales initiatives and commission structures on targeting certain incremental revenue streams,” he explained. “In retrospect, we believe those decisions had a negative impact on our revenue growth and margin for the quarter.”
As a result, iHeartMedia has “initiated steps to realign” its focus on “higher-margin digital revenue opportunities,” said Pittman. “We believe we’ll start seeing the positive impact of those adjustments in both revenue growth and margins as early as Q2.”
French music streaming company Deezer reported on Tuesday that its 2022 revenues rose 13% to 451 million euros ($478 million), as the company reduced its losses by 18 million euros ($19.1 million) through a combination of growth through partnerships and eliminating marketing spend.
The company reported its adjusted gross profit rose 16% to 98 million ($104 million) euros in 2022 versus 2021 on greater margin improvement. The 18 million euros ($19.1 million) the company reported in savings came partly from growth — Deezer grew its top line by 51 million euros ($54 million) and improved gross margins by 30 million euros ($32 million) — and partly from reducing its marketing spends in certain emerging markets.
For years since its 2007 launch, the Paris-based company angled to gain customers by partnering with telecommunications companies. But under new chief executive Jeronimo Folgueira, Deezer has focused on a business-to-business (B2B) approach, aiming to gain more streaming users in major markets through partnerships with companies that already have established customer bases.
That piggy back approach — which is already in place with Sonos in the United States, RTL in Germany and DAZN in Italy — allows Deezer to reach prospective customers in major markets without investing to build a brand first. Folgueira, who joined Deezer in June 2021, says 2022’s earnings show the strategy has legs, and he expects his company to generate revenue growth of more than 10% in 2023 as they work toward achieving profitability by 2025.
“All of the ground work on B2B that we’ve been doing is starting to pay off,” Folgueira tells Billboard. “Those deals are just the beginning. We want to enter markets through partners, and we are targeting the United Kingdom and other major European markets like Spain.”
Last year, Deezer partnered with German broadcast giant RTL Deutschland to deliver music and video content over the app RTL+ Musik, putting Deezer in a position to compete in the crowded streaming space in the world’s fourth-biggest recorded-music market, and it teamed up with the Italian sport subscription streaming platform DZAN.
This year, Deezer struck a long-term agreement with the U.S. speaker and hardware company Sonos to power its Sonos Radio and subscription service Sonos Radio HD, a deal that will extend Deezer’s reach to 16 countries, including the United States, Canada, the United Kingdom, France and Germany.
Deezer remains strongest in France, where it is bundled with telecom company Orange and has 4.4 million subscribers, and in Brazil, where it partnered with TIM Celular in 2016 and has 2.7 million subscribers, according to company filings. Worldwide, Deezer has 9.4 million subscribers compared with Spotify’s 195 million subscribers and 273 million free (ad-supported) users, while TME has 82.7 million paying subscribers, according to the companies’ latest earnings reports.
The company was among the first DSPs to raise prices last year when it upped the price for an individual plan to 10.99 euros ($11.66) per month from 9.99 euros ($10.60) and family plans to 17.99 euros ($19.09) per month from 14.99 ($15.91).
Those hikes helped deliver a 14.3% increase in the company’s average revenue per user (ARPU) in 2022. Deezer had 9.4 million subscribers as of Dec. 31, 2022, down 2.2% from a year earlier.
“On the year as a whole, there was basically no impact on churn despite a roughly 10% price increase,” Folgueira says. “People are willing to pay more for proper quality music.”
Recent news — quarterly earnings releases and a major investment — had big impacts on some music companies’ stocks Thursday (Feb. 9).
Warner Music Group shares fell 4.3% to $35.09 and dropped as much as 10.5% during the day following the company’s fiscal first quarter earnings release Thursday. Warner’s revenue fell 7.8% (2.7% at constant currency) to $1.48 billion and net income fell 34% to $124 million. A relatively light release schedule, a slowdown in ad-supported revenue and a shorter quarter — the prior year period had one additional week — contributed to the decline. New CEO Robert Kyncl called it a “tough quarter” and pointed to a slate of releases in the second half of the year by Ed Sheeran, Cardi B and David Guetta.
MSG Entertainment shares ended the day up 11.7% to $59.58 and reached as high as $61.33 during the day, up 15% from the prior day’s closing price. Revenue in the quarter rose 24% to $642.2 million. The proposed spinoff is expected to be completed by the end of March and the MSG Sphere in Las Vegas is slated to open in September. Investors had other reasons to cheer, however, as MSGE announced it implemented a cost reduction program that resulted in layoffs and other non-labor savings.
In Seoul, SM Entertainment shares rose nearly 19% to 117,000 won on Friday (Feb. 10) on news that HYBE acquired a 14.8% stake to become its largest shareholder, though shares dipped to 109,800 won, up 11.5%, by mid-morning. Likewise, HYBE shares climbed as much as 10.2% to 218,500 won ($172.76) before falling to 212,500 won ($168), up 7.2% from the previous closing price.
LiveOne shares gained 2.1% to $0.97 despite climbing as high as $1.09, up 14.7% from Monday’s closing price. The company raised its guidance for full-year adjusted EBITDA from $11 million to $12 million. LiveOne’s revenue for the quarter ended Dec. 31 declined 17% to $27.3 million due to its decision not to produce “capital-intensive tentpole or pay-per-view events” until next fiscal year. That decision, along with reduced annual expenses and overhead, helped LiveOne turn adjusted EBITDA from -$4.8 million to $3 million.
The U.S. markets broadly fell on Thursday. The New York Stock Exchange dropped 0.7% and the Nasdaq fell 1%. The S&P 500 fell 0.9%. Markets in Europe fared better, however. The DAX, an index of 40 blue-chip German stocks, rose 0.7%. The FTSE 100, a measure of 100 stocks on the London Stock Exchange, rose 0.3%.
Reservoir Media’s revenues rose and profit margins expanded last quarter, as the strength of its music publishing business helped offset a $4 million net loss, the company reported Wednesday (Feb. 8).
Reservoir reported that its top-line revenues rose by 16% to $29.9 million for the third quarter of its fiscal year 2023, which ended Dec. 31. The main drivers of that jump were the music publishing division, where revenues of $22 million jumped 14% from a year ago on strong digital streaming revenues, and Reservoir’s small artist management business, which delivered a year over year revenue increase of more than 200% from touring and merchandise sales at live events.
Reservoir founder and chief executive Golnar Khosrowshahi said the firm, which recently bought Dion‘s catalog and signed publishing deals with popular Indian rappers MC Altaf and D’Evil, has $2.3 billion in prospective catalog acquisition deals in its pipeline.
“We will continue to benefit from the overall momentum in the music industry,” Khosrowshahi said on a conference call discussing the quarterly results. “We are approaching the last fiscal quarter of the year with confidence.”
Reservoir raised its guidance for the fiscal year 2023, which ends March 31, for the second straight quarter. Executives said they now expect to report full-year revenue in the range of $120 million to $122 million and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of $46 million to $47 million.
The company reported that its adjusted EBITDA for the third quarter rose 24% to $10.9 million.
“While we are happy with our continued strength in the top line and operating margins, we did experience some pressure on the bottom line due to elevated costs during the quarter,” said Reservoir CFO Jim Heindlmeyer during the earnings call.
Reservoir reported a net loss of $4.1 million, stemming from a one-time non-cash tax expense related to the higher U.K. tax rate for 2023 and the extinguishment of some existing debt. That resulted in a diluted loss of 7 cents for the quarter compared to earnings of 2 cents per share for the quarter.
Depreciation and amortization costs also rose due to catalog acquisitions, while company administration expenses rose 19%, mainly due to Reservoir’s expanding management business division.
In the recorded music division, Reservoir reported revenue of $7.6 million, up just 1% over last year. While digital revenues in the division rose 17% to $5.3 million, declines in physical and synchronization revenue resulted in roughly flat growth year over year.
Harry Styles, Mariah Carey and big streaming gains helped Sony Music Entertainment finish 2022 with a bang. Styles’ album Harry’s House and Carey’s typically strong holiday performance drove SME’s revenues up 22.9% to 363.7 billion yen ($2.57 billion at quarter’s average exchange rate) in its fiscal third quarter ended Dec. 31, 2022.
Styles’ 2022 release Harry’s House and 2019 album Fine Lines were among SME’s top performing titles of the quarter. Carey’s “All I Want for Christmas is You” topped the U.S. Hot 100 chart for four weeks (chart dates of Dec. 17, Dec. 24, Dec. 31 and Jan. 7). The company also pointed to strong sales and streams by Steve Lacy’s Gemini Rights, SZA’s SOS, Future’s I Never Liked You, Chris Brown’s Indigo, Beyonce’s Renaissance and Bruce Springsteen’s Only the Strong Survive.
Quarterly operating income improved 14.3% to 63 billion yen ($445 million). Adjusted earnings before interest, taxes, depreciation and amortization were 80 billion yen ($565 million).
The recorded music division’s revenues improved 30.1% to 239 billion yen ($1.69 billion). Streaming revenue grew 33.2% to 159.1 billion yen ($1.12 billion) and accounted for 66.6% of recorded music revenue, up from 65% in the prior-year period. Download revenue, up 14.3%, accounted for just 4.7% of digital revenues compared to 5.5% a year earlier. Physical sales declined 6% to 31.1 billion yen ($219.1 million) and accounted for 13% of total recorded music revenue, down from 18%.
Publishing revenues increased 42.9% to 74.2 billion yen ($523.4 million) in the quarter. Within publishing, streaming revenue improved 59.8% to 41.6 billion yen ($293.3 million). Streaming’s share of publishing revenue grew to 56% from 50.1% in the prior-year period. Other publishing income rose 25.9% to 32.6 billion yen ($230.1 million).
Excluding foreign exchange and the visual media and platform segment, SME’s recorded music and publishing divisions grew 10% in the quarter. That is a smaller improvement because changes in foreign exchange rates helped SME’s yen-denominated results. From the end of 2021 to 2022, the value of the yen declined against the three main foreign currencies: -10% against the U.S. dollar, -6.9% against the euro and -1.8% against the pound.
The visual media and platform segment was a drag on earnings due to lower anime sales, however. The segment’s revenue fell 16.3% to 47.4 billion yen ($334.7 million).
Looking ahead, the company maintained its forecast for full-year revenue at 1.37 billion yen (approximately $9.7 billion) at operating income at 265 billion yen (approximately $1.87 billion).
A rebound in the live music business helped German concert promoter CTS Eventim improve its revenues to 694.4 million euros in the third quarter ($699.3 million at the average exchange rate in the quarter), 84% higher than the same period in 2019 before the COVID-19 pandemic, the company announced Thursday.
Revenue increased due to contributions from pre-sales, the staging of events and higher income from currency conversion. That was offset by a reduction in COVID-19 economic aide, received as compensation for event cancellations or events with reduced capacity, of 76.8 million euros ($77.3 million) from the prior-year period.
“These excellent results are testimony to the fact that our strategic initiatives are taking us from strength to strength following the post-pandemic restart of live entertainment,” said CEO Klaus-Peter Schulenberg in a statement. “Even in the face of new uncertainties caused by the high level of inflation and geopolitical factors, we will maintain this proven course in order to continue to drive our profitable growth, both at home and abroad.”
The live entertainment segment’s revenue was 563 million euros ($566.9 million) in the third quarter, up 103.6 from the same period in 2019, and 1.11 billion euros ($1.11 billion) in the nine-month period, a 42% improvement. Live entertainment EBITDA was 64 million euros ($64.4 million), about triple the amount in the same period of 2019.
The ticketing segment’s revenue improved to 137 million ($138 million) in the third quarter, up 28% from the same period in 2019, and to 339 million ($341.1 million) for the nine-month period, up 10.4% from 2019. CTS Eventim sold 17.2 million tickets in the quarter and 45.1 million tickets in the nine-month period, increases of 31% and 23%, respectively, from the pre-pandemic periods in 2019.
The company’s staff, including part-time workers, grew from 2,357 a year ago to 2,956 at the end of the third quarter.
The company sounded an alarm about rising costs stemming from higher personnel costs in security, catering and stage technology “induced by an increasing shortage of specialists in the event industry and at least temporarily higher demand due to the fact that both postponed and new events are currently being held at the same time,” it explained in its earnings release. The fourth-quarter results could be hampered by rising energy prices and a possible pullback of fan spending due to inflation’s impact on household purchasing power.
Still, CTS Eventim is going to have a record year in 2022. The company expects full-year revenue of 1.7 billion euros ($1.71 billion) and earnings before interest, taxes, depreciation and amortization of 330 million euros ($332.3 million). That would represent gains of 17.8% and 16.2% over 2019, which was a record year for CTS Eventim. The company’s tenor improved from a quarter ago, when management was unable to provide a precise forecast for 2022 “owing to uncertainty about the pandemic and the geopolitical situation going forward.”
CTS Eventim shares fell 0.3% to 56.00 euros on Thursday. Year to date, the share price is down 13%.
In its third-quarter earnings report Tuesday (Nov. 15), China’s leading music streaming company Tencent Music Entertainment Group (TME) said quarterly net profits soared 39% to RMB 1.09 billion ($154 million USD) from last year as the number of online music subscribers reached a record 85.3 million.
TME, which owns streaming platforms QQ Music, Kugou and Kuwo, plus karaoke app WeSing, reported that music subscriptions rose 18.3% to RMB 2.25 billion (USD $316 million) for the third quarter ending Sept. 30 compared to the same period in 2021. The number of subscribers rose by nearly 20%, up from 71.2 million in the third quarter 2021.
“As we are employing a balanced approach to grow paying users…revenues from online music services increased at a healthy pace in the third quarter, driven by year-over-year gains in subscriptions,” Cussion Pang, TME’s executive chairman, said in a statement. “Meanwhile, effective cost optimization measures and improved operating efficiency led to increased profitability amid challenging macro conditions this quarter.”
Overall, online music services revenues rose by 18.8% to RMB 3.43 billion (USD $482 million), but that wasn’t enough to offset a 20% decline in revenues from social entertainment and services, the company’s other main business unit. TME’s total revenues fell by 5.6% to RMB 7.37 billion (USD $1.04 billion).
Media companies have reported widespread declines in mobile revenues for the third quarter, as increased prices for many and the worsening economic outlook globally has caused consumers to rethink everyday expenses. TME was not spared from the trend. The number of monthly active mobile music users fell by 7.7% to 587 million in the quarter, compared to 636 million in the third quarter last year — a decline the company attributed to casual listeners dropping off the platform.
Monthly average revenue per paying user of TME’s online music edged 1% lower, to RMB 8.8 million (USD $1.24 million) compared to RMB 8.9 million (USD $1.25 million) during the year-ago period.
The company bought back $800 million of its own stock in the third quarter, part of a $1-billion stock buyback program it announced last spring.
In September, TME launched a secondary listing on the Hong Kong Stock Exchange; it was already publicly traded on the New York Stock Exchange in the United States. Its move to issue secondary shares in Hong Kong followed similar moves by other big Chinese companies seeking to safeguard themselves against potential ramifications of the geopolitical tensions between China and the U.S.
SM Entertainment, home of such K-pop groups as NCT 127, SuperM and Girls’ Generation, had revenue of 238.1 billion KRW ($165 million at the Sept. 30 exchange rate) from July 1 to Sept. 30 — up 65.4% year-over-year and a 29.1% improvement from the previous quarter, the company announced Monday (Nov. 14).
Operating margin — operating profit as a percentage of revenue — improved to 12.5% in the third quarter of 2022, up from 6.9% in the prior-year period. Net income was 29.2 billion KRW ($20.2 million), up 129.5% year-over-year and 15% higher than the second quarter.
The company’s multi-pronged business, which generates revenue across all facets of its artists’ careers, improved across the board: Recorded music revenues grew 46.6% to 135.1 billion won ($93.6 million). SM Entertainment’s album sales improved from 3.25 million units in the prior-year period to 4.7 million units. It had two standout releases in the quarter: NCT 127’s 2 Baddies peaked at No. 3 on the Billboard 200 albums chart and Aespa’s Girls: The 2nd Mini Album topped Billboard’s Top Album Sales chart.
Concert revenues climbed to 10.9 billion won from virtually nothing a year ago. In the quarter, Revenue from appearances — including television, advertising and events — grew 96.4% to 24.3 billion KRW ($16.8 million). Licensing revenue improved 76.1% to 26.4 billion KRW ($18.3 million).
Revenue at SM Entertainment’s subsidiaries grew 119.5% to 136.9 billion KRW ($94.9 million). These companies include Dream Maker, a Hong Kong-based concert booking agency; SM Culture & Contents, a content production and advertising business; and Keyeast, a Korea-based merchandising and licensing business. According to the release, these subsidiaries benefitted from the reopening of domestic and international touring and increased demand for advertising promotion and business-to-business travel.
Several SM Entertainment artists are on tour in the fourth quarter: NCT 127 has nine dates in Korea, U.S., Thailand and Indonesia; Super Junior has six concerts in Indonesia, Hong Kong and Taiwan; and Ryeowook and NCT Dream have six and five concerts in Japan, respectively.
The company’s fourth-quarter release schedule includes new mini albums by Chen, BoA and Red Velvet and Red Velvet member Seulgi. Red Velvet’s Feel My Rhythm album peaked at No. 20 on the Billboard Global Excl. US chart in April; it also landed on the Indonesia Songs (No. 3), Malaysia Songs (No. 5), Phillippines Songs (No. 15) and Taiwan Songs (No. 16) charts. The group’s The ReVe Festival: Finale EP reached No. 40 on Billboard’s Top Album Sales chart in January 2020.
SM Entertainment’s shares rose 0.5% on Monday to 65,800 KRW. Down just 11.3% in 2022, SM Entertainment’s share price has fared better than Korean music companies HYBE (down 61.2%) and YG Entertainment ( down 26.4%) but lags behind JYP Entertainment (up 12.0%), home of Twice, Stray Kids and iTZY.
SM Entertainment’s shares rose 19% on Sept. 16 after the company announced would prematurely end a contract with a production company owned by the company’s founder and largest shareholder, Lee Soo-man. Its share price, however, has fallen 14% since then.
