The machine always seems to try and stifle it, but streaming is now becoming the main gravy train for major labels. Universal Music and its parent company Vivendi have announced their 2015 revenue and UMG posted a 2.7 percent increase at constant currency, a measure that eliminates currency fluctuations or 12.1 percent in actual terms. A large part of this growth came from streaming.
Revenues rose to $5.66 billion in 2015. This was driven by streaming and subscription services, which now account for 52 percent of the label giant's revenue in the second half of the year. Streaming grew a whopping 43.2 percent, which offset a drop in physical sales by 6.7 percent. Digital music sales grew by 8.6 percent.
Its biggest sellers in 2015 were Taylor Swift, Justin Bieber, Sam Smith, The Weeknd and the Fifty Shades of Grey Soundtrack. Sam Smith and Taylor Swift were two of their top earners for two straight years.
It points to releases in 2016 such as Ariana Grande, Drake, Beck, Rihanna, will.i.am, Nick Jonas, Kanye West and Jack Garratt as potential big earners for the company.
80 percent of its revenue comes from Europe and North America, with 75 percent of that coming from just five countries, the UK, France, Germany, Japan and the U.S. Worryingly only five percent of its revenue comes from the BRIC markets Russia, China, Russia and India accounted for just 3 percent of the revenue, though it anticipates that number for grow with more favorable regulatory environments, copyright laws and local streaming services. Trying to predict government regulation in these countries may be a fool's errand though.
Streaming continues to become a more and more important part of major label's revenue stream as we move forward into 2016 and beyond. This will give services like Spotify, Deezer, SoundCloud Apple Music and TIDAL more leverage to negotiate deals since they know the labels need them as the growing source of income.
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