Fueled by the rapid adoption of streaming, Universal Music Group’s revenue grew by 15.6% over the same period in 2016, rising to $1.5 billion for the quarter ending June 30, its parent company Vivendi said in its second-quarter earnings report Thursday. Operating income was up 48% to $183 million.
Subscription and streaming revenue accounted for 45% of UMG’s revenue, more than offsetting the continuing drop in downloads (down 16%) and physical (down 23%) sales. Universal Music Publishing saw a boon from streaming as well, with revenue up nearly 11% to $431 million.
This fuels rumors that Vivendi will move ahead with an IPO for UMG, reports of which were initially downplayed by UMG chairman/CEO Lucian Grainge but continue to be made to seem irresistible — aided this week in no small part by a wildly enthusiastic report on the music industry’s prospects from Goldman Sachs. That report predicted that global streaming revenues will reach $28 billion by 2030 and increased UMG’s valuation 16 percent to $23.5 billion.
The company pointed to successful releases from Drake and Kendrick Lamar, as well as the 50th Anniversary edition of The Beatles’ “Sgt. Pepper’s Lonely Hearts Club Band,” but particularly the rampant streaming success of Luis Fonsi’s “Despacito” (featuring Daddy Yankee and Justin Bieber), which is the most streamed song of all time with over 5 billion streams across all platforms.