While many may believe that major labels have one foot in the grave, some recent revenue figures out from Universal Music Group tell a different and far more lucrative story, with UMG raking in over 7.1 billion over the past year, thanks to major artists like Drake, Taylor Swift, and Post Malone.
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Guest post by Bobby Owsinski of Music 3.0
Who says that the major record labels are dying? Far from it, if the latest revenue figures from Universal Music Group (UMG) is any indication. The company brought in more than $7.1 billion last year, and much of its growth was attributed to streaming music income.
Profits come from having hits and Universal certainly had them last year, with big releases from Drake, Post Malone, XXXTentacion and The Beatles, as well as the A Star Is Born soundtrack. The company also signed or re-signed major artists like Taylor Swift, the Rolling Stones and Sir Elton John.
UMG had the distinction of having all of the top 5 tracks, the top 4 artists, plus the top 3 albums on Spotify in 2018. UMG artists also held the top 5 positions and an amazing 14 of the top 20 positions on Apple Music’s Global Top 100 Songs 2018.
Streaming income was up almost 32% last year, while downloads fell by 31%, and physical sales were down by almost 18%, which is about average for the industry at this time. Gone are the days when record execs wondered how streaming could ever replace physical sales, as it’s happened as streaming continues to grow on a similar pace to how physical sales are declining.
Since UMG had such a great year, now is the perfect time for it to sell, and that’s exactly what may be happening soon, as parent company Vivendi has signaled that it’s willing to let go of up to 50% of the company. Now valued at a whopping $42 billion, there may never be a better time for the French media company to cash out. The company is now in the process of choosing an investment bank to speed the process along, which could mean that the company may look different next year at this time.