UMG ENJOYS A RECORD YEAR: $9.4B

Universal Music Group raked in €8.5b—about $9.4b—a 14.4% increase over 2020. In touting the year's results to stock analysts, UMG chief Sir Lucian Grainge went deep into the company's catalog-acquisition strategies.

Recorded Music revenues were up 14.3% to €6.8b as subscription and streaming revenue grew 16.9% to €4.48b. Ad-supported streaming was particularly strong, due to the ongoing improvement in ad-based monetization and new and enhanced deals in social media. Physical revenue grew 18.6% year-over-year to €1.12b, driven by strong vinyl demand as well as growth in direct-to-consumer sales.

Recorded Music EBITDA was €1.6b, up 18.7% year-over-year, with margin improving to 23.7%.

Top sellers for the year included new releases from Olivia Rodrigo, BTS, Justin Bieber, Morgan Wallen, ABBA and Taylor Swift as well as continued sales of The Weeknd and Billie Eilish.

Adjusted net profit was up nearly 24% to €1.27b.

Calling 2021 a historic year, UMG Chairman and CEO Grainge said: “We helped our artists achieve extraordinary success—including eight of the IFPI´s top 10 global artists of the year. In addition to strong performance in streaming, we drove new areas of opportunity for our artists ranging from merchandise to brand management, sponsorship, e-commerce and film & television. And we expanded our partner portfolio into emerging growth areas such as health and fitness, Web3 and social video. Our success in all these efforts showed in our financial performance. Going forward, we see the industry continuing to grow and—with our unique experience, our deep understanding of the business and the vast artist relationships and global creative networks—we expect to further strengthen our position as the industry leader as we continue to break new artists and build on our world-class catalog."

Music Publishing revenue amounted to €1.35b, up 12.6% over 2020. Revenues benefited from ongoing growth in subscriptions and streaming, an improvement in synchronization income and catalog acquisition. Music Publishing EBITDA of €307m was up 14.1%.

License and other revenue increased 15.5% year-over-year to €776m.

In Q4, revenue of €2.52b was up 19%, with Recorded Music pulling in €1.98b, a 15.2% spike. Music Publishing revenue hit €408m, up 31.6%, in the fourth quarter.

Beyond the numbers, Grainge addressed the "new enthusiasm" for catalogs and royalty streams, noting that UMG buys "only the best at the right price." The company is "looking for the truly special ones" where UMG has the "unrestricted ability" to work with the copyrights. As for individual royalty streams, he said, "We're more than happy to leave those to others."