Taylor Swift, Olivia Rodrigo Drive UMG's $3 Billion Q3 2023 Revenue

Universal Music Group, the frontrunner among Sony and Warner, has released its financial report for Q3 2023 (July, August, and September). The company revealed a total revenue of $2.995 billion across all its divisions, including recorded music, publishing, merchandise, and more. This reflects a 10.6% increase compared to its Q3 2022 revenue (YoY).

Notably, $75 million of this revenue stems from the settlement of a copyright infringement lawsuit involving an internet service provider.

Recorded Music

For recorded music, including both streaming and physical sales, UMG generated an overall revenue of $2.21 billion, a 5.2% increase compared to this time in the previous year. Its Subscription and Streaming revenues from last quarter reached $1.53 billion, a year-over-year growth of 10.9%. A considerable factor for this growth is the increase in subscription streaming revenues, driven by the expansion of global subscribers.

If you remember, Spotify mentioned it added 6 million new subscribers to reach a total of 226 million paying subscribers in Q3 2023.

For ad-supported streaming revenue, UMG generated $388.55 million, representing a 5% YoY growth.

On the other hand, Physical Music sales experienced a 20% YoY growth, generating $319.98 million in revenue for UMG. This surge is attributed to strong vinyl sales, particularly in the US and Europe, as well as the growth of multi-format physical releases in Japan. As discussed earlier, Japan has a deep-rooted affinity for physical music consumption.

UMG's roster of top-selling artists such as Taylor Swift, SEVENTEEN, Morgan Wallen, Olivia Rodrigo, and King & Prince played a crucial role in driving its financial performance last quarter.

Publishing

UMG's Publishing division experienced significant growth in Q3 2023, generating $534.40 million in revenue, marking an impressive 24.6% year-over-year increase.

Within the publishing division, digital revenue played a key role, reaching $319.98 million and demonstrating a 33.6% growth compared to the previous year. Performance revenue also saw a notable surge, increasing by 21.8% to $115.37 million in Q3. Sync revenue also contributed $58 million, representing a 3.8% year-over-year growth.

Merchandising

UMG's merchandising and other revenues soared to $247.06 million, showcasing a year-over-year growth of 27.5%. This increase can be attributed to the expansion of direct-to-consumer sales and a surge in merchandising sales during live tours.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)

UMG experienced a 5.9% year-over-year decline in EBITDA, amounting to $520.25 million.

 What Does a Fall in EBITDA Mean? A fall in EBITDA means the company generated less profit than it did in the previous financial period.