Welcome to Music Business Worldwide’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
It was a busy week for music company earnings, with Sony and Warner releasing their calendar Q2 numbers, following Universal’s release of its equivalent figures a few weeks earlier.
Sony reported USD $2.54 billion in revenues from recorded music and publishing in the quarter, up 11.4% YoY (on a US dollar-converted basis), while Warner Music’s revenues of $1.55 billion were up 3.1% YoY on a constant currency/like-for-like basis (discounting one-time impacts from events such as BMG‘s termination of its WMG distribution deal last year).
But it was Warner’s 13.7% YoY spike in streaming subscription revenues that stole the show, bringing much-needed relief to music investors perturbed by the slowdown in growth of streaming revenue reported elsewhere.
Meanwhile, HYBE is in the midst of a restructuring dubbed HYBE 2.0, and the latest news on that front is that the K-pop giant is launching a label services business in the US market.
Finally, MBW explored the delicate power balance between Spotify and Universal Music Group (and why UMG might end up turning the screw on Spotify’s free tier).
Here’s what happened this week…
Credit: yllyso/Shutterstock
1) IN CASE YOU MISSED IT… HYBE, THE COMPANY BEHIND SUPERSTARS BTS AND SEVENTEEN, JUST LAUNCHED A LABEL SERVICES BUSINESS IN THE US
Last week, HYBE, the South Korea-headquartered music company behind superstars BTS and SEVENTEEN, rebooted.
The company launched HYBE 2.0, a new global strategy under the leadership of newly appointed CEO Jason Jaesang Lee, who is succeeding Jiwon Park, HYBE’s CEO for the past three years.
One of its most surprising plans was buried in a detailed run-down of the new structure.
HYBE revealed that it’s entering one of the most competitive (and lucrative) sectors in modern music: providing distribution and services for independent artists…
2) SONY GENERATED $2.54BN FROM RECORDED MUSIC AND PUBLISHING IN CALENDAR Q2, UP 11.4% YOY; RECORDED MUSIC STREAMING REVENUES UP 5.0% YOY
Sony’s global music rights operation – across recorded music and music publishing – generated USD $2.54 billion in the three months to end of June 2024.
That’s according to MBW’s calculations based on Sony Group Corp’s calendar Q2 2024 (fiscal Q1 2025) results, as announced by the Japanese firm on August 7.
The $2.54 billion figure was up 11.4% year-on-year (vs. calendar Q2 2023) at US dollar-converted constant currency.
Sony’s global recorded music operation generated USD $1.92 billion, up 10.8% YoY.
Its global music publishing operation – led by Sony Music Publishing – generated USD $621.3 million in the three months to end of June this year, up 13.3% year-on-year…
3) WARNER MUSIC GROUP GENERATED $1.55BN IN CALENDAR Q2; SUBSCRIPTION STREAMING REVENUES ROSE 13.7% YOY
Warner Music Group has published its financial results for the three months ended June 30, 2024 (calendar Q2 – the company’s fiscal Q3).
According to the company’s fiscal Q3 (calendar Q2) results, WMG saw its quarterly global company-wide revenues reach USD $1.554 billion (across recorded music, music publishing, and other activities).
WMG noted in its SEC filing on Wednesday (August 7) that “consistent with the prior quarter”, the company’s recorded music digital revenue growth was unfavorably impacted by the termination of its distribution agreement with BMG, which, it said, resulted in $26 million less revenue compared to the prior-year quarter.
Including the BMG termination, WMG’s company-wide revenue in calendar Q2 was up 0.6% YoY at constant currency…
Credit: Imagespace/Alamy
4) WARNER MUSIC GROUP JUST BUCKED THE TREND OF STREAMING REVENUE GROWTH SLOWDOWNS. HOW?
“Well, I’m glad that we’re suddenly no longer worried about the music industry imploding.”
A jovial text from a prominent music industry investor sent to MBW yesterday afternoon, shortly after Warner Music Group‘s calendar Q2 earnings announcement.
The phrasing was tongue in cheek, the underlying message a little more serious.
After Universal Music Group and Sony both reported streaming revenue growth slowdowns in the three months to the end of June, collywobbles about music’s long-term growth story had crept into Wall Street offices.
Industry observers had begun to worry; industry analysts had started to frown. That Goldman Sachs chart showing 1.2 billion+ music streaming subscribers by 2030 suddenly felt a bit less convincing.
Then Warner Music Group changed the narrative…
5) ON… THE DELICATE POWER BALANCE BETWEEN SPOTIFY AND UNIVERSAL MUSIC GROUP (AND WHY UMG MIGHT END UP TURNING THE SCREW ON SPOTIFY’S FREE TIER)
“Universal Music sales beat expectations in second quarter.”
That was the (perfectly accurate) headline from Reuters minutes after Universal Music Group confirmed its Q2 2024 results on July 24.
A few moments later, Sir Lucian Grainge trumpeted the same theme in his opening address of UMG’s earnings call.
“[This was] our seventh consecutive quarter of double-digit increase in adjusted EBITDA,” noted Grainge, confirming that UMG’s revenues were up ~11% YoY in the quarter, with EBITDA up ~10% YoY.
He added: “Our ability to deliver sustainable growth like this quarter after quarter is a product of how we’ve designed UMG.”
Then the storm began…
MBW’s Weekly Round-Up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs.Music Business Worldwide
