The Global Music Industry
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Today we focus on the music industry, in particular looking at how the largest record label in the world is performing financially by visualising their income statement for FY22. Also, which songs are making the most money years after their release through royalties? And have you ever wondered how many streams you’d have to get to earn a $1,000?
Universal Music Group Income Statement FY22
UMG is the largest music company in the world and owns/has a joint share in many other large record labels such as Abbey Road Studios and Def Jam Recordings. Artists signed to their label include: Ariana Grande, Drake, Adele, and Taylor Swift.
In 2022, they generated revenue of over €10B, with the majority of this coming from recorded music, followed by music publishing, and then merchandising. Their net profit margin is at 7.6%, which is actually a little lower than industry averages, and also compared to their competitors with Sony Music at 11.6% and Warner Music at 9.4%.
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Highest earning songs by royalties
Royalties are paid to those who own the rights (this could include the recording artists, songwriters and other intermediaries), for the licensed use of their work. The highest earning song here is ‘Happy Birthday’ by the Hill Sisters, a song that almost everybody in the world knows.
It has also been calculated that Sting’s song ‘Every Breath You Take’ (number 8 on this list), earns the singer approximately $2,000 a day!
How many streams to earn $1,000?
We take five of the most well-known streaming services and visualise how many streams you would need to hit to earn $1,000. Spotify, arguably the most popular service, is also the lowest paying platform per stream, where only $0.003 is earned per stream.
Technically, this is oversimplifying it and artists will actually probably not see that amount, because these payouts are usually given to recording owners and then distributed from there.
See you on Friday for a deep dive on EVs!
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