– “Create Some Unwelcome” Noise: Universal Music Crashes 30% On Streaming Revenue Woes:
Shares of Universal Music Group plummeted up to 30% in Amsterdam on Thursday after the world’s largest record label, representing top artists like Taylor Swift, Billie Eilish, Drake, Adele, and Ariana Grande, reported disappointing second-quarter earnings. The report fell short of investor expectations regarding subscription and streaming revenue growth.
Universal’s second-quarter report showed subscription revenue in recorded music grew 6.5% year-over-year, or 6.9% in constant currency, missing the Bloomberg estimate of surveyed analysts for growth of 11%.
- Recorded Music subscription revenue grew 6.5% year-over-year, or 6.9% in constant currency and streaming revenue decreased 4.2% year-over-year, or 3.9% in constant currency, while physical revenue grew 9.5% year-over-year, or 14.4% in constant currency and license and other revenue grew 18.0% year-over-year on both a reported and constant currency basis
On an earnings call, Chief Financial Officer Boyd Muir told investors that Spotify and YouTube’s weak advertising revenue growth were some of the major drivers of softer sales. He said there are emerging roadblocks with social media platforms becoming major music distributors.
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