PARIS, France (CelebrityAccess) — French media conglomerate Vivendi announced the financial results for Universal Music Group’s second fiscal quarter of 2021 revealing that music is booming at the major label.
UMG reported revenue of 1.48 billion Euros for the quarter for recorded music operations, a 10.8% increase from the previous year’s Q2 results.
Revenue growth at the label giant was driven primarily by digital and streaming, which earned just over 1 billion during the period, up by 19.6% from the previous year’s Q2.
Digital music sales such as downloads weighed on UMG’s results, accounting for 81 million euros, a falloff of 37.4% from the same period in 2020.
Perhaps counterintuitively, UMG saw physical sales grow in the second quarter, generating 213 million euro, up by 14.8% year-over-year.
As well, music publishing continued to be profitable, earning UMG revenue of 271 million euro, an improvement of 6.9% from last year.
EBITDA, which is shorthand for earnings before interest, taxes, depreciation, and amortization, was up sharply in the first half of 2021 for UMG, with the label-giant posting 822 million euro, up 31.8% from the first half of 2020.
The quarterly earnings report is likely to be the last before Vivendi spins UMG out as a publicly traded company in September. However, there are indications that there may be some turmoil in the plan. A special purpose acquisition company formed by billionaire investor Bill Ackerman fell apart earlier this month amid regulatory scrutiny, forcing Ackerman to invest instead through his private equity fund.
As well, a consortium led by Tencent Music is planning to take a major stake in Universal as it goes public but the company is grappling with Chinese anti-trust regulators who just this week announced they plan to force the Chinese streaming platform to surrender all of its exclusive licensing deals with major labels within the next 30 days.
It is unclear how the increased focus of Chinese market regulators on Tencent will impact the proposed deal.