Streaming Tide Turns for Universal

In a significant landmark for major record labels, Universal Music Group (UMG) has become the first recorded music business to generate a billion dollars of revenue from streaming services in a calendar year.

According to analysis from at Music Business Worldwide and based on the Q4 results posted by Universal’s French parent company Vivendi, the major’s streaming income was up 43.2% to €954m, with the figure equating to over £1bn once exchange rates are applied.

A statement from Universal said: “We continue to see positive momentum in the business, driven by ongoing growth in streaming and subscription and tempered by continued declines in download and physical, leading to a reasonable increase in results this year – and enhanced results from 2017 and onwards.”

Digging in further, in the second half of 2015, streaming claimed 52% of UMG’s 2015 digital music revenue, with downloads at 48%. Overall, digital music claimed 48% of Universal’s complete recorded music income in 2015 – including download, streaming, physical and licensing. Overall streaming revenue was up 47% across the year, while downloads declined by 13%.

Universal’s overall revenues from recorded music were up by 2.4%, with the clear narrative being that for the first time, streaming was enough to offset the decline in physical formats and downloads.

In related news, Spotify Founder Daniel Ek this week fired a further shot across the bows when he claimed that Amazon, Apple and Google “Have music as a hobby” in a revealing Q and A session with Quora. The implication being the Spotify are 100% dedicated to music content which is in fact a very small part of his competitor’s businesses. When asked “where Spotify is headed next?” Ek claimed that the service “really want to soundtrack every moment of your life”, suggesting that the streaming sweet spot may prove to be a mix of discovery, curation and a focus on sound tracking different moments of the day.