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Common Music Group (UMG), the world’s greatest music rights-holder, listed on the Euronext Amsterdam Inventory Alternate on September 21 with a gap valuation of $54.3 billion.
As we speak (October 27), simply over a month on from UMG’s blockbuster IPO, all eyes are on the music firm once more, because it broadcasts its first ever monetary outcomes as a publicly-traded entity, for the three months to finish of September (Q3).
As reported by MBW earlier right now, UMG delivered one other bumper set of quarterly outcomes.
Throughout all of its divisions (together with recorded music, publishing and extra), UMG noticed revenues within the three months to finish of September (Q3) of €2.153 billion (approx. $2.5bn at present trade charges).
That was up 17.4% YoY at fixed forex, and up by 6.5% on the €2.022 billion revenues UMG posted within the prior quarter (Q2).
Along with submitting its first monetary outcomes right now, the corporate carried out its first ever earnings name as a publicly-traded firm, on which Government Vice President of Digital Technique Michael Nash and EVP, Chief Monetary Officer Boyd Muir have been grilled about UMG’s outcomes.
On the decision, UMG Chairman and CEO Sir Lucian Grainge addressed buyers himself, throughout opening remarks during which he hailed the “starting of a brand new wave of progress and evolution” within the music business.
Learn Sir Lucian Grainge’s handle in full, beneath:
I’m delighted to be right here with you for this, our very first earnings name with Common Music Group as a public firm.
Let me start by setting the context with a elementary truth. Music is on a stunningly highly effective trajectory.
For instance, simply final week, The IFPI, the worldwide [recorded music] commerce affiliation, issued a report underscoring what we see every single day within the market about music’s rising affect. After surveying greater than 40,000 music followers in 20 nations, the report discovered that common [per person] listening grew to 18.5 hours per week, the equal of 368 songs per shopper. And over the previous two years, the period of time followers spent on subscription audio streaming rose by 51%.
Once you mix this elevated time with additional penetration of streaming monetization in each developed and high-growth music streaming markets, it’s simple to know our optimism about business progress.
Individuals are not solely having fun with extra music than ever earlier than, they’re additionally connecting with artists in ways in which have been unimaginable only a few years in the past. A various mixture of musical genres are delighting followers throughout an increasing panorama that features short-form video, social networks, health apps, gaming, reside streams, digital items and way more.
And at the same time as all that’s happening, the demand for bodily merchandise continues to develop. This increasing music consumption panorama means increasing music monetization. In a couple of minutes, Boyd [Muir] shall be addressing our monetary ends in extra element. However for now, listed here are two highlights for the quarter simply ended.
All segments contributed to a 17% income progress [at UMG], in comparison with the prior 12 months quarter and to a rise [in margin to] 21% of adjusted EBITDA.
We really feel that these numbers communicate for themselves. Trying forward, we imagine there’s unprecedented alternative for additional progress. On condition that followers now have entry to basically all the world’s music within the palm of their arms, and that shopper demand for music throughout cultures, eras, languages, and genres is at historic highs, I stay unwavering in my confidence that the trail we’re on will lead us on to better heights.
As somebody who’s been within the enterprise for his total profession. I can inform you that progress like this doesn’t simply occur. It begins, as in fact it should, with nice music from gifted artists and songwriters. However from there, it takes arduous work by impressed professionals and funding by firms like ours to develop and broaden the complete music system.
However make no mistake, there actually aren’t any different firms like ours.
“UMG is the driving pressure of progress and innovation within the business, at a time when the music market seemingly has no limitations to entry.”
UMG is the driving pressure of progress and innovation within the business, at a time when the music market seemingly has no limitations to entry. When anybody wherever can report and distribute audio content material. And when each single day, roughly 60,000 tracks are uploaded to Spotify alone, the fact is it’s tougher than ever for artists to chop via all the noise to seek out and increase their viewers.
That’s precisely why we place the utmost precedence on maximising alternatives for artists to convey their music to the world and to attach with followers in more and more wealthy methods. Once we assist artists break via to industrial success, we’re additionally empowering them to achieve new ranges of inventive creativity and to go on to hopefully develop actually sustainable careers. By prioritizing our give attention to artist improvement, and persistently delivering better alternatives for artists’ success.
We stay the vacation spot of alternative for these artists looking for a accomplice that each shares a long-term, career-oriented imaginative and prescient and has an unmatched observe report to show it. As I stated, we’re uniquely positioned to drive the best worth, based mostly on our world assets and advertising and marketing expertise. That merely is why the world’s best artists of each stage of their profession, proceed to signal, renew and increase their partnerships with UMG.
Let me spotlight some developments this quarter with a couple of of our artist partnerships.
Final month, Germany’s most profitable music artist, Helene Fischer, prolonged her partnership with Common Music Germany. Fischer has topped Germany’s annual gross sales charts for 5 of the final eight years, greater than another artist in German chart historical past. Her new studio album, Rausch, debuted on October 15, is already this 12 months’s fastest-selling album [in the market]. In August, we entered into an in depth worldwide alliance with Aerosmith, the finest promoting American arduous rock band of all time.
“We’re uniquely positioned to drive the best worth, based mostly on our world assets and advertising and marketing expertise.”
That [deal] consists of their total discography, merchandise and audiovisual tasks. We couldn’t be extra excited to unite the work of this iconic group at UMG forward of their upcoming fiftieth anniversary. For the primary time, all of Aerosmith’s unbelievable recordings shall be marketed and distributed solely by one firm: us.
As an indication of the actually nice world nature of UMG’s enterprise right now, in July, we have been thrilled to signal an unique world settlement with Indian music famous person and entrepreneur Badshah. With greater than 15 billion streams worldwide, he’s a dynamic Delhi-born rapper, singer, and music producer, and is without doubt one of the world’s hottest musical artists.
Our multi-year settlement embraces all components of his profession, together with future recordings, music publishing rights for non-film compositions, model licensing and partnerships. He’s a most welcome addition to our household.
We additionally introduced a brand new settlement with one of many world’s most acclaimed artists, a number of Grammy winner Andrea Bocelli. And just final week, BTS – the world’s primary finest promoting group, based on the IFPI – introduced that they are going to be increasing their relationship with UMG, partnering with us globally, together with within the US.
Earlier I discussed our long-term, career-oriented method to artist partnerships, an method that additionally consists of discovering progressive methods to introduce legendary artists’ music to new generations. This quarter, I can cite no higher instance than ABBA, one of the profitable pop teams of all time. ABBA just lately introduced the upcoming UMG launch of their first studio album in 40 years – and we’re additionally partnering with the band on a revolutionary kind of live performance.
Subsequent 12 months the group will carry out as avatars in an immersive digital live performance expertise with a reside 10-piece band in an area in London. The information of the upcoming live performance took ABBA’s again catalog to the highest of the streaming charts and gained them, in only one week, over 1,000,000 followers on TikTok alone.
“As a result of UMG has right now’s hottest artists and hits in addition to the world’s deepest and why this catalog, we’re in a singular place to ship the important content material and platform engagement new digital companies search, with the intention to speed up their enterprise fashions.”
There’s one more means during which we’re the business’s driving pressure: As a result of UMG has right now’s hottest artists and hits in addition to the world’s deepest and widest catalog, we’re in a singular place to ship the important content material and platform engagement [that] new digital companies search, with the intention to speed up their enterprise fashions.
Our place inevitably leads us to focus relentlessly on the longer term; and we do. I’ve [already] described music as turning into an indispensable ingredient in a variety of media, short-form video on social networks, match tech, gaming, and many others. Music is all over the place right now. And it will likely be all over the place sooner or later, as innovation drives market transformation and the panorama retains increasing.
well being for instance, the place we’ve promoted thrilling new purposes in music licensing inside health companies, we’ve now established a partnership that harnesses music as a key part of medical remedy. One thing which I’m significantly enthusiastic about.
We just lately partnered with a digital therapeutics firm, Medrhythms, our first deal within the medical space. And the primary deal of its type within the business, for the usage of our catalog is first prescription music to stimulate elements of a affected person’s mind.
This is only one instance that factors to the ever increasing scope of the music enterprise panorama. We’re additionally fostering progressive new partnerships in social media constructing on the stable basis of our business main strategic relationships with YouTube, Fb, Instagram, TikTok. Over the past 4 months, now we have accomplished new offers with SNAP, Lomotif and Kuaishou.
We’re increasing our social media partnership portfolio with progressive companies that additional prolong engagement and monetization alternatives for our artists with fanbases world wide.
One other space the place we intensely targeted and have bolstered our efforts is the manufacturing of unique movie and TV content material. This can be a key side of our means to advertise our IP exterior of the normal realms of music.
Our success on this area was already evident on the latest 2021 US Emmy Awards: UMG’s PolyGram Leisure garnered 11 nominations, with the Bee Gees How Can You Mend a Damaged Coronary heart receiving six nominations and profitable one Emmy.
Polygram Leisure’s Zoey’s Extraordinary Playlist obtained 5 nominations; Interscope’s movie Billie Eilish: The World’s a Little Blurry obtained 4. And in July, The Velvet Underground documentary premiered on the Cannes Movie Pageant to rave evaluations earlier than opening final week each theatrically and on Apple Plus.
“I firmly imagine the music business is simply initially of a brand new wave of progress and evolution. We’re positioning UMG to steer this evolution for the good thing about our artists, followers, [and] clearly shareholders.”
Whereas we’re speaking about awards, I’d be remiss to not point out a couple of exceptional chart statistics as effectively.
By means of the third quarter of 2021, based on MRC Information, within the US UMG has all the high 4 albums [of the quarter] – from Morgan Wallen, Olivia Rodrigo, Pop Smoke and Justin Bieber, in addition to the No.1 album for 33 of the 39 first weeks of the 12 months. [That’s] as effectively as all of this 12 months’s Prime Seven [biggest] debut weeks, from Drake, Kanye West, Olivia Rodrigo, Taylor Swift, J. Cole, Morgan Wallen and Billie Eilish. Within the UK, based on the Official Charts Firm, thus far this 12 months, now we have eight of the Prime 10 artists [plus the year’s] high album, with Olivia Rodrigo Bitter and three of the highest 4 singles.
On Spotify’s International chart, Olivia had the No.1 tune via the third quarter of 2021, remaining in that spot for 45 consecutive days.
That is only a small pattern of what’s occurring world wide at Common Music Group. I’m happy with all that we’ve achieved to convey us so far and particularly, what we’ve achieved this quarter.
Let me guarantee you, our imaginative and prescient stays far reaching and our technique is, and at all times shall be, long run.
I firmly imagine the music business is simply initially of a brand new wave of progress and evolution. We’re positioning UMG to steer this evolution for the good thing about our artists, followers, [and] clearly shareholders. Thanks.Music Enterprise Worldwide
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