There’s a fresh flow of cash in the record business these days. For an idea of how and why, look no further than the amounts that Sony, Universal and Warner pulled in from streaming services alone in 2018: a combined $6.93 billion in wholesale revenue, as reported in recent investor filings.
That sum — which is $1.6 billion more than the $5.3 billion that the Big Three made from streaming in 2017, the first year of significant music-industry resurgence in two decades — amounts to about $19 million a day, or $800,000 per hour. Investor filings from the three companies’ parent organizations (Vivendi, Sony Corp and Warner Music Group) along with Music Business Worldwide analyses show that more than half of the trio’s combined across-all-formats revenue of $13.14 billion came from streaming last year. In 2016 and 2017, the three record companies got about 35 percent and 40 percent of their revenue from streaming, respectively.
As the influence of streaming platforms like Spotify and Apple Music continues to grow, the domination of physical music sales has been erased in tandem. All three major record companies saw multimillion-dollar declines in sales of physical formats like CDs and cassettes in 2018 — with Sony, which has a suite of artists like Adele who outperform in physical sales, losing as much as a quarter-billion dollars in that category. Vinyl sales continued to be an outlier in the streaming-is-quashing-physical-records narrative, but their numbers were too small to offset the broader physical losses.
In terms of total earnings, the clear leader of the three majors was Universal, which, thanks to its roster of artists like Ariana Grande, Drake and Lady Gaga holding the top of the charts hostage, saw its total music revenue swell from $2.2 billion in 2017 to a record $3 billion in 2018. (That’s an extra $2.4 million per day coming into the company, MBW points out.) Universal’s new set of part-owners will reap the benefits — that is, after they recoup the billions they’ll have to shell out for control of the highly valued company in the first place.