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Streaming outperforms downloads for Universal this summer, just

By | Published on Wednesday 11 November 2015

Universal Music

So, in amongst the usual dib dabs of stats for Universal Music that appeared in the quarterly financial statement from its parent company Vivendi yesterday, was the news that the mega-major made more out of streaming during the summer quarter than it did from downloads. Just. In that 51% of the firm’s €450 million of digital revenue came from streaming.

This is the first time the majority of Universal’s quarterly digital income has come from streaming platforms, though Warner Music passed that landmark earlier this year.

It’s never entirely clear how the majors report streaming monies, in terms of how advances and such like are reported, and, of course, the streaming model should bring in more steady revenues across the year, rather than the spikes around busy release periods that are a feature of the CD and download market. Though, nevertheless, these figures confirm that the key record industry trend of the last eighteen months continues: downloads are tanking, streaming is booming.

A disproportionate part of that streaming income will come from premium subscription services, of course, even though more people consume streams via ad-funded platforms like Pandora, YouTube and the freemium level of Spotify.

It’s known that Universal has become increasingly concerned about the margins on free streaming in the last year, though as the market matures, the industry needs to pull in ever more mainstream consumers who are never going to pay $10 a month for a standalone music service. But what’s the solution? Better ad sales, more bundling or a leaner $2 subscription service? All three preferably, but concerns remain about what kinds of digital services can co-exist.

Elsewhere in Universal’s third quarter financials, the major had pretty much flat revenues when currency fluctuations are removed, while earnings before tax and such like were down 24.5% to €114 million. For the year to date, revenues are up but profits are down.