Music Business Worldwide has been crunching a veritable mountain o’ numbers today (August 9).
That’s because the past 48 hours have seen two major music companies – Warner Music Group (WMG) and Sony Music Group (SMG) – post their calendar Q2 revenue/profitability figures for investors. (Sony did so earlier today via its Japanese parent, Sony Group Corp.)
These results followed the equivalent calendar Q2 numbers from publicly-traded Universal Music Group (UMG), the world’s biggest music rightsholder, which it reported to the Amsterdam Euronext late last month.
All of this means that – combined with previously-reported calendar Q1 figures from UMG, Sony, and WMG – we’ve been able to apply MBW’s microscope to how the ‘majors’ performed across the first six months of 2023.
What have we discovered?
Well, for starters, there’s that headline above: The three ‘majors’ – across recorded music, publishing, and other income streams – jointly generated USD $12.99 billion in the first six months of 2023.
This figure was a clear billion dollars (almost to the penny!) larger than the $11.99 billion that the ‘Big Three’ generated in revenues in the same period of 2022.
It also means – oh yes – that the three majors combined generated an average of approximately $72 million per day in the first half of this year… or roughly $3 million per hour.
Below, we dig deeper into what each of the three major music companies generated in revenues across four separate categories in H1 2023:
- (i) ‘Recorded Music + Publishing etc’: This brings together all recorded music revenue streams for the majors, with music publishing revenues, plus ancillary revenues from operations such as merch and concert ticketing. (Sony’s ‘Visual Media + Platform’ revenues have been omitted, as explained here.)
- (ii) Music Publishing: As you’d expect, all revenues attributed to music publishing in the quarter;
- (iii) Recorded Music: As you’d expect, all revenues attributed to recorded music by each company in the quarter, including merch. (For this analysis, MBW has combined UMG’s separately-reported ‘recorded music’ and ‘merchandise + other’ revenues as ‘Recorded Music’; this makes for a fairer like-for-like comparison with its two biggest competitors.)
- (iv) Recorded Music: Streaming: As you’d expect – all revenues attributed to streaming within the recorded music operation of each company in the quarter. Note: This figure includes both ad-funded and subscription streaming revenue.
Before we get into the data, an explainer of how MBW calculated the below is probably useful.
We have translated both calendar Q1 2023 and calendar Q2 2023 sets of results from Universal (which announces its fiscal numbers in Euros) and Sony (which announces its fiscal numbers in Japanese Yen) into US Dollars at the average prevailing currency exchange rate of the quarter. We have done the same for calendar Q1 2022 and calendar Q2 2023.
Sony Corp provides the prevailing average Yen-USD rate for each quarter in question; for Universal, we have used the average quarterly EUR-USD conversion rate identified by the European Central Bank, which you can see through here. Warner Music Group reports its numbers each quarter in the root currency of USD.
A couple of other must-include caveats: (i) Sony’s results below, via Sony Group Corp, are global, so include the performance of its autonomous recorded music and music publishing companies in Japan, as well as in the rest of the world; (ii) The below represents revenues as corporately reported by the majors, and typically includes revenues generated by distributed partners.
Right. Onto the numbers!
Recorded Music + Publishing etc.
As mentioned, in terms of all global revenue streams (omitting Sony’s ‘Visual Media & Platform’) – across music publishing, recorded music, and ‘other’ – the three majors collectively brushed the $13 billion mark in H1 2023.
Universal Music Group grew its reported half-year revenues by $400 million YoY in H1 2023, up to $5.57 billion.
(Important: UMG’s YoY revenue growth figure was materially negatively affected by a change in the way it accounted for certain music publishing revenues during H1 2022 – see below.)
Sony grew its total H1 music revenues by $448 million YoY in the first half of this year, to $4.47 billion.
And Warner – which had a soft calendar Q1 2023 but a significantly stronger calendar Q2 – grew by $155 million YoY, hitting $2.96 billion in H1 this year.
Music Publishing
Bolstered by improved streaming rates in the United States, all three publishing divisions have seen significant growth so far this year.
Sony’s music publishing operation – led by New York-based Sony Music Publishing – topped $1 billion in half-year revenues in H1 2023 ($1.05bn).
That was up by $95 million (+10.0% YoY) vs. the amount it generated in the same period of 2022.
Coming in a close second is Universal Music Publishing Group, which generated $961 million in the first half of 2023.
(Important context: UMPG’s reported H1 2022 revenues were significantly increased by a benefit stemming from a change in UMG’s accounting policy that altered the way it recognized revenues paid out by collection societies*. This obviously makes a true monetary YoY comparison vs. H1 2023 here difficult. However, UMG reported to investors last month that H1 2023 global music publishing revenues would have been up 18.5% YoY at constant currency if the 2022 collection-society-accounting benefit was excluded.)
It was also a strong H1 2023 for Warner Chappell Music, which hit USD $540 million in revenues in the period.
That represented a $65 million YoY increase in half-year revenues – in percentage terms, up 13.7% YoY.
Recorded Music (including merchandise)
Universal Music Group generated $4.61 billion in recorded music revenues (plus merchandise) in H1 2023.
That figure was up by $366 million year-on-year.
Sony’s global recorded music operation (again, including merch) reported total H1 revenues of $3.42 billion, up by approximately $352 million vs the same period of 2022.
And Warner Music Group’s recorded music division generated $2.43 billion in H1 2023 – $89 million more than it generated in the prior-year period.
Recorded Music: Streaming
It’s always interesting to drill down into those recorded music numbers and just look at the fastest-growing part of the record industry: Streaming.
Collectively, the major music companies saw YoY growth in joint recorded music streaming revenues of $484 million in the first half of 2023, up to a combined H1 total of $6.90 billion.
Universal Music Group generated 43% of that figure, with $2.98 billion in recorded music streaming revenues in the period.
Sony generated $2.33 billion in recorded music streaming revenues in H1 2023, up $215 million YoY.
And Warner Music Group generated $1.60 billion in recorded music streaming revenues, up by $46 million YoY.
* A little more context on UMPG’s accounting change in H1 2022. In prior years, UMG recognized collection society revenues when the relevant society notified Universal of a usage by the ‘end customer’. From the end of 2021 onwards, recognition of this revenue at UMG became based on an accrual for the best available estimate of when said usage occured and – related to that estimated usage – the amount of revenue probable to be collected. This accounting change led to an undisclosed revenue benefit at UMPG in Q1 2022, and then a EUR €98 million (USD $104m) revenue benefit in Q2 2022.Music Business Worldwide
