Vivendi's Universal Music Group grew its operating income by roughly 75 percent in the third quarter to €174 million euros ($193.1 million) on revenues of €1.31 billion ($1.45 billion), as compared with €99 million ($111 million) on €1.18 billion ($1.32 billion) during the corresponding period last year. That means the company also posted a 10.8 percent increase in revenue, reflecting the growth of streaming -- thanks to spikes at Spotify and the addition of Apple Music to the sector -- on the overall music business.
Looking at the first nine months of the company's fiscal year, ended Sept. 30, UMG turned in a strong performance with revenues up 3.8 percent to €3.62 billion ($4.02 billion) from €3.49 billion ($3.9 billion).
Even though the company's U.S. market share is down this year, UMG rode the rising revenue tide provided by streaming, coupled with strong cost controls to increase operating income to €393 million ($434 million), up from the prior year's €278 million ($311 million), a 40.8 percent increase.
Breaking out music revenue by operation, the recorded music division experienced a nearly 3 percent gain in revenue to €2.83 billion ($3.14 billion) from the corresponding period total of €2.75 billion ($3.08 billion); while music publishing saw revenue grow to €588 million ($652.7 million) from €565 million ($632 million), a 4.1 percent gain. Meanwhile, merchandising and other revenue grew to €227 million ($252 million) from €209 million ($234 million).
Within the recorded music operation, the streaming channel was the top performer generating €1.03 billion ($1.14 billion), up nearly 47 percent from €701.8 billion ($786 million), while physical sales, down 13.4 percent was the second largest source of revenue at €751 million ($833.6 million) as compared to the the first nine months of 2015 when physical produced sales of €867 million ($971 million). Downloads suffered an even bigger decline, falling 18.9 percent to €547 million ($607.2 million) from €674.2 million ($755.1 million). Finally, bringing up the rear, licensing and other revenue declined slightly to €498 million ($553 million) from €505 million ($565.6 million).
That means streaming now comprises 36.4% of the recorded music operation; physical 26.6%; downloads 19.4%; and licensing and other revenue sources 17.6%. That compares with last year's product breakout, respectively, of physical 31.6%; streaming 25.5%; downloads 24.4%; and licensing and other 18.4%.
The company said key fourth quarter releases include Avenged Sevenfold, Bon Jovi, DNCE, Emeli Sande, Lady Gaga, Mary J Blige, Metallica, the Rolling Stones, Sting and the Weekend.
Stepping back to look at parent Vivendi, the company saw revenue decline by 3.3 percent to €3.9 billion from €4.03 billion in the first nine months of 2015, while operating income declined nearly 21 percent to €439 million from €554 million.