How Much Do You Think Major Labels Make From Streaming Per Hour?

This year promised to offer grand economic progress for the major music companies.

As the opening stages of 2020 passed us by, Vivendi invited in a Tencent-led consortium to buy a slice of Universal Music Group, as Warner Music Group readied a now-nailed IPO on the NASDAQ.

In the background, licensing deals with the likes of Snapchat, TikTok, Facebook, Peloton and others were being pieced together, promising to bring an entirely new wave of income into the record and music publishing industries.

Yet by April, when the incipient damage wreaked by COVID-19 and related global lockdowns on the worldwide economy was becoming clearer, it was obvious this wasn’t going to be the year of prosperity the likes of Goldman Sachs had forecast.

Since then, the commercial consequences of coronavirus on music rights have become commonplace – the cessation of live music, the closure of the high street, the end of public events, the halting of TV and movie production, the reduced release schedules, the reduction in streaming ad revenues etc.

This series of influences have hurt each of Universal, Sony and Warner, with all three companies seeing YoY revenues fall in Q2. Streaming, however, has remained a bright story amongst the gloom.

MBW’s latest Stat Of The Week: according to the analysis, the three major record companies saw their streaming revenues collectively hit $2.21bn in the three months to end of June.

MBW first reported in February that the major labels had surpassed the milestone of generating more than $1m per hour from streaming.

That memorable number stayed consistent in Q2 – despite the negative impact of COVID-19 (and those lighter-than-usual release schedules).

In calendar Q2 2020, according to MBW’s calculations, the majors collectively generated $24.3m per day, or – oh yes – $1.01m per hour in recorded music revenues from streaming.

This, in the midst of an unprecedented global pandemic.

The big question now is whether the major record companies can match or even better the $14.93bn they jointly generated from all formats in 2019 across the course of this year.

It won’t be easy: according to MBW’s calculations, Universal, Sony and Warner’s recorded music operations generated $6.91bn in the first half of 2020 from the same income streams.

(These figures include streaming, downloads and physical sales, as well as merchandise and other ancillary income sources. However, it’s important to note that, in Sony Music’s case, they don’t include gross revenues that were then paid out to independent label and artist partners; Sony Corp doesn’t report these revenues in its corporate figures.)

To match that $14.93bn figure in 2020, the majors are going to have to rely on a more lucrative second half of the year than they saw in the six months from January to June.

Statistics and reporting courtesy of Music Business Worldwide