UMG

Research evidence excerpt

UMG

riod. UMG also hinted that we could see a Style Exposure

significant cost-saving programme later in the year – although investors will

understandably be skeptical until savings actually drop to the bottom line. The next

catalyst will be the launch of AI derivative services which we believe will

transform the UX and accelerate UMG’s subscription growth.

Subscription growth was below expectations

Subscription revenue growth excluding Downtown slowed from 7.9% in Q1 to

6.7% in Q2 vs a consensus of 9.2% – and we had thought that the risk was to the

upside. A Deep Dive into UMG and the Music

Industry. Watch here.

In Q1, the 7.9% growth had comprised a 3% contribution from pricing, a 2%

market share headwind, and c6.9% from ARPU weighted volume growth. In Q2,

Bollore wins in Paris ... Read here.pricing contributed 3.5% with the full benefit of Amazon, Spotify and YT price

rises. The market share headwind eased to 1.5% with momentum improving over

the course of the quarter. Q2 also saw a one time 1% headwind from minimum UMG … a hairy peach. Read here.

guarantees, accruals, audits and catch-up payments that had boosted growth in the

previous year. This implies that the underlying ARPU weighted volume growth Spotify CMD: Landmark UMG licensing

slowed from 6.9% in Q1 to 5.7% in Q2. UMG suggested that price rises have not deal. Read here.

impacted growth, with the slowdown consistent with normal fluctuations in

subscriber growth around the timing of promotions rather than any meaningful Forget dilution … the real question is the

change in industry trends.

size of the AI opportunity. Read here.

H2 subscription should improve Bolloré’s Masterplan. Read here.

Market share improved through Q2 and entered H2 with better momentum than

at the start of the quarter.