Universal Music Group, the largest record label in the world, unlocks a new milestone, the revenue collection from music streaming exceeded $1.06 billion in the fourth quarter. The company’s CEO, Lucian Grainge, praised the continued growth of streaming and technology’s ability to connect artists with their fans.
During the company’s fourth-quarter investor call, though, he pushed for a new business model because he thought streaming didn’t give enough credit to many artists and fans for what they did.
Grainge says that Universal Music Group is working with its partners to come up with new business models that will make sure streaming keeps growing and artists get paid fairly.
In January, the company signed a new deal with the music streaming service Tidal. The label is currently in talks with other major international platforms, including short-form video, which is probably a reference to TikTok.Universal Music Group’s chief digital officer, Michael Nash, didn’t say anything about talks with “any specific partner.”
Top sellers like releases from Drake, Seventeen, and Taylor Swift’s “Midnights,” which made history by taking up all ten spots on Billboard’s Hot 100 list of most popular songs, boosted Universal Music Group’s Q4 earnings.
Adjusted pre-tax earnings reached $668 million, compared to $614 million in the fourth quarter of 2021, beating the EBITDA of $737 million.
‘Streaming’ typically means streaming media without the need to download the content on digital devices. Streaming has now become a better business model for companies due to its consistent growth and ability to create a stable revenue system. Streaming allows artists to have a global outreach, which is given back to them in the form of royalties.
The fact that Universal Music Group’s income has grown at an exponential rate shows how powerful streaming is. Following that, revenue rose by 16.7% to $3.1 billion, with streaming revenue up 13.3% from a year ago.
Subscription and streaming revenue, which accounts for more than half of Universal Music’s revenue from recorded music, went up by 18.5 per cent from a year ago, totalling $1.58 billion.
In fact, the company’s collections point to a bigger shift in the way people buy things. Streaming has been critical to the success of the music industry over the past few years, and Universal Music Group’s earnings show that this trend is continuing.
However, the company’s CEO’s remarks suggest that there are still issues with how streaming platforms compensate artists. In the coming months, it will be interesting to see how the company tries to come up with new ways to pay artists fairly.
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