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Universal Music Group’s revenues surged 21.6% to 10.34 billion euros ($10.96 billion) for all of 2022, boosted by strong returns from recorded music subscriptions and streaming.
The world’s biggest music company reported the revenue its recorded music division gets from subscriptions and streaming rose by nearly 19% to over 5.3 billion euros ($5.6 billion), while digital revenues in its music publishing division rose by nearly 50% to over 1 billion euros ($1.05 billion) in 2022, all helping it achieve a nearly 15% uptick in operating profit.
UMG chairman and chief executive Lucian Grainge said the earnings were evidence the company’s diversified revenue streams has made it an example of the music business’ steady strength amid a darkening economic outlook.
“We continue to successfully manage the company for long term growth while driving strong results in our core business — developing great artists and introducing their music to fans around the world,” said Grainge. “Our roster … achieved enormous commercial and creative success in markets around the world. We also worked to evolve and expand relationships with our existing DSP partners as well as establish new ones in fitness, health, gaming and the metaverse, driving the industry forward though leadership, creativity, innovation and collaboration.”
UMG was home to seven of the top 10 albums on the Billboard 200, 15 of the International Federation of the Phonographic Industry’s (IFPI) top 20 global artists and four of Spotify’s top five global artists in 2022.
UMG reported adjusted earnings before interest, taxes, depreciation and amortization rose 19.4% to 2.14 million euros ($2.26 billion) for 2022 from a year ago. Adjusted EBIDTA margin fell by 0.4 percentage points to 20.6%.
The company’s free cash flow increased by a whopping 70.2% to 638 million euros ($675 million) largely from the growth in adjusted EBITDA, according to the company’s filings.
UMG’s Earnings Highlights:
Revenue rose 21.6%, or 13.6% in constant currency, to 10.34 billion euros ($10.96 billion) for 2022 from 8.5 billion euros ($9 billion) in 2021
EBIDTA rose 20.3%, or 12.5% in constant currency, to 2.03 billion euros ($2.15 billion) in 2022 from 1.69 billion euros ($1.78 billion) in 2021
EBITDA margin fell to 19.6% in 2022 from 19.8% in 2021
Adjusted EBITDA rose 19.4%, or 11.7% in constant currency, to 2.14 billion euros ($2.26 billion) in 2022 from 1.79 billion euros ($1.93 billion) in 2021
Operating profit rose 14.8%, or 7.9% in constant currency, to 1.6 billion euros ($1.69 billion) in 2022 from 1.39 billion euros ($1.48 billion) in 2021
Net debt fell 10% to 1.8 billion euros ($1.9 billion) in 2022 from 2 billion euros ($2.1 billion) in 2021
Free cash flow rose 70.2% to 1.09 billion euros ($1.15 billion) in 2022 from 638 million euros ($675 million) in 2021
Recorded Music Division Highlights:
Recorded music revenue overall rose 16.3%, or 8.8% in constant currency, to 7.9 billion euros in 2022 from 6.8 billion in 2021
Subscriptions and streaming revenue rose 18.7%, or 9.8% in constant currency, to 5.3 billion euros in 2022 from 4.5 billion euros in 2021
Physical revenues rose 7.7%, or 4.1% in constant currency, to 1.2 billion euros in 2022 from 1.12 billion in 2021
License and other revenue rose 19.6%, or 13.4% in constant currency, to 1 billion euros in 2022 from 896 million in 2021
Downloads and other digital revenue rose 4%, or fell 2.9% in constant currency, to 337 million euros in 2022 compared to 324 million in 2021
Music Publishing Highlights:
Music publishing revenues overall rose 34.8%, 26.3% in constant currency, to 1.8 billion euros in 2022 from 1.3 billion euros in 2021
Performance revenues rose 24.9%, or 18.2% in constant currency, to 371 million euros in 2022 from 297 million euros in 2021
Synchronization revenues rose 18.6%, or 10.3% in constant currency, to 236 million euros in 2022 from 199 million euros in 2021
Digital revenues rose 49%, or 38.7% in constant currency, to 1.04 billion euros in 2022 from 698 million euros in 2021
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Universal Music Group (UMG) has struck a deal to acquire a 49% shareholding in PIAS Group, the leading European independent music company.
Financial terms of the arrangement, announced early Wednesday (Nov. 30), were not disclosed.
By taking a minority stake in PIAS Group, UMG, the world’s leading major music company, expands on its strategic global alliance struck with the indie powerhouse in June 2021.
PIAS, or Play It Again Sam, was founded in Belgium 1982 by Kenny Gates and Michel Lambot, both career-long advocates for the independent music sector.
Gates and Lambot will retain majority control of the company, a joint statement reads, and UMG will have no seats on the company’s board.
Headquartered in London and Brussels, PIAS is said to be one of the largest independent and privately-owned music companies in the world.
The group includes the PIAS Label Group, which oversees the business’ various record label interests, and Integral Distributions Services, which provides support to its own, in-house labels and upwards of 100 independent label partners, including ATO, Beggars Group, Bella Union, Chrysalis, Domino, Epitaph, LSO, Mute, Ninja Tune, Partisan, Secretly Group, Transgressive and Warp.
Today, PIAS boasts 16 offices around the world with 300 employees.
“The boldly independent and music-centric culture that Kenny and Michel have built over the last four decades has provided a vital creative network to so many artists,” comments UMG chairman and CEO Lucian Grainge, in a statement.
“While much of the past was focused on ‘majors versus indies,’ it’s clear that today, the important divide in our industry is about those committed to artist development versus those committed to quantity over quality. “
He continues, “We share Kenny and Michel’s passion for developing artists and moving culture, and we recognize that a healthy music ecosystem needs companies like PIAS who are committed to amplifying the best voices in independent music.”
As PIAS celebrates its 40th anniversary, Gates and Lambot insist the new arrangement will enable its artists, clients and team to flourish.
Says Lambot, one of the founders of the pan-European independent music companies’ trade body Impala, “we are still as ambitious as we were when we started out about growing our global presence and providing a world class service to the independent music community.”
Gates adds, “These days we are competing with finance and tech giants and a partner like Universal Music Group provides the additional support for us to compete and grow. Universal made it clear that they like us, they trust us and they need us, because they can’t do what we do and they value it highly.”
This move, Gates continues, “makes us stronger and secures the future of our brand, our staff and our partners while maintaining control of our destiny.”
Created in a Brussels cellar four decades ago by Gates and Lambot, PIAS began life as a distributor of independent labels. Four years, the pair launched publishing company Strictly Confidential, and PIAS continued to grow its footprint, including the opening of offices Paris and London (in 1994), Hamburg (1995), Madrid (2000), New York and Stockholm (2013), and Sydney (2017) through the acquisition of Inertia.
Kanye West‘s former record label and music publisher have joined a chorus of companies in denouncing antisemitic rhetoric following a rash of recent statements made by the rapper.
Though Universal Music Group (UMG) — which worked with West for many years via Def Jam and its merchandise company Bravado — and Sony Music Publishing (SMP), which administers West’s song catalog, no longer work with the rapper now known as Ye, both have taken a public stand against his recent antisemitic comments in statements sent to Billboard.
A spokesperson for UMG clarified that “Def Jam’s relationship with Ye as a recording artist, Def Jam’s partnership with the GOOD Music label venture and Ye’s merchandise agreement with Bravado all ended in 2021.” The company owns the copyright on his recordings up to 2016 and distributed his recordings until last year. The spokesperson continued, “There is no place for antisemitism in our society. We are deeply committed to combating antisemitism and every other form of prejudice.”
SMP has been the administrator for West’s extensive catalog of musical works for years but the rapper’s publishing administration deal expired in early 2022. In an internal memo to employees, Sony leadership assured their staff that “at Sony Music Group, commitment to tolerance, inclusion and equality for all are at the heart of who we are as a company. Consistent with these values, we denounce antisemitism. Through our partnership with the UJA Federation, we work to combat prejudice against the Jewish community.”
Pursuant to the old agreement, SMP will continue to administer West’s musical works for an undisclosed period of time. Because SMP’s dealings with West were purely administrative and did not include ownership, after this period ends the company will no longer have any interests in his catalog.
West’s former manager, Scooter Braun, who is Jewish, posted a graphic today on Instagram, seemingly in response to his former client’s recent statements. “First they came for the Socialists, and I did not speak out — because I was not a Socialist. Then they came for the Trade Unionists and I did not speak out — because I was not a trade Unionist. Then they came for the Jews, and I did not speak out — because I was not a Jew. Then they came for me — there was no one left to speak for me,” the post read.
These statements all follow West’s three-hour interview with MIT scientist Lex Fridman on Tuesday in which the rapper said, “It’s genocide and population control that Black people are in today in America, that is promoted by the music and the media that Black people make, that Jewish record labels get paid off of.”
Earlier on Tuesday, Adidas announced that it had ended its partnership with the Yeezy designer and rapper over his offensive remarks — a decision that the German sportswear brand said will affect its bottom line significantly — after celebrities and others on social media urged the brand to join the many other companies in fully cutting ties with West. As a result of being dropped from Adidas, West has lost his billionaire status, according to Forbes.
In a now-removed episode of the Drink Champs podcast, West told interviewer N.O.R.E., “the thing about it being Adidas is, like, I can literally say antisemitic s–t and they can’t drop me … I can say antisemitic things and Adidas can’t drop me. Now what?”
The hateful and discriminatory rhetoric West voiced on Drink Champs followed a number of other concerning statements from the rapper in recent weeks. On Oct. 3, the rapper wore a White Lives Matter shirt to his Yeezy Paris Fashion Week show. Just days later on the evening of Oct. 8, he sent out a tweet saying he wished to go “death con 3” on Jewish people, which was subsequently removed by Twitter. West is currently suspended from Twitter and Instagram for antisemitic posts that the social networks both said violated their policies.
Over the weekend, a group of demonstrators, inspired by West’s antisemitic remarks, unfurled a banner on a Los Angeles overpass that read “Kanye is right about the Jews.”
Other business partners of West’s have also dropped him in recent weeks, including Creative Artists Agency, MRC, Balenciaga and JPMorganChase, though the latter relationship was severed prior to the rapper’s antisemitic outbursts. On Tuesday, Gap said it was taking immediate action to remove all West-related products from shelves a month after the rapper severed his relationship with the retailer.