Universal reports merchandise boom in 2019

Universal Music Group (UMG) has revealed that its revenues from merchandise sales nearly doubled in the first nine months of 2019, boosted by strong demand and a healthy global touring market.

According to UMG parent Vivendi’s third-quarter (Q3) 2019 financial results, merchandising and other related revenues increased by a whopping 82.4% year on a constant-currency basis compared to the first nine months of 2018, “thanks to increased touring activity and growth in retail and D2C (direct-to-consumer) revenues.”

In total, UMG grew turnover 17.5% in the nine months ending September 2019, to over €5 billion (€1.8bn in Q3). France-based Vivendi is currently in the process of selling a 10% stake in UMG to China’s Tencent for €30bn – as well as, potentially, “other partners”, according to its latest financials, “some of whom have already expressed an interest in investing at a similar price level”.

The growth of the music merchandising sector has accelerated in recent years, with merch sales totalling nearly US$3.5 billion in 2018 (though the impact of Brexit is cause for concern in Europe).

Universal’s merchandising division is Bravado, which earlier this year expanded its footprint by acquiring rival operation Epic Rights. Its major-label rivals are also increasingly making inroads into the merchandise space, with Warner Music last year acquiring EMP Merchandising and Sony Music investing in the Araca Group and Kontraband.

Merch grew “thanks to increased touring activity and growth in retail and D2C revenues”

Elsewhere in the Vivendi group, Vivendi Village – the business unit that includes its live entertainment and ticketing activities – grew revenues more than 50%, to €108 million, in the January–September period, bolstered by a strong festival summer and growth for See Tickets in North America.

“Live activities, which include Olympia Production (France), U Live (Great Britain) and venues in France and Africa, recorded very strong revenue growth at €56 million, a strong increase (x2.4),” reads the Q3 financial report. “Vivendi Village now produces 12 festivals that experienced a significant increase in attendance this past summer, especially Garorock in France and Sundown in the United Kingdom.”

Vivendi’s other festivals include Les Déferlantes Brive Festival in France, the UK’s Love Supreme, Poptopia in the US and Universal Music Festival in Spain.

“Ticketing activities are now all grouped under the same See Tickets brand,” continues the report. “Ticketing revenues amounted to €48 million, an increase of 19.5% compared to the first nine months of 2018 (+8.5% at constant currency and perimeter), due in particular to the robust growth of the activities in the Unites States, where revenues doubled in one year.”

In total, Vivendi turned over €4bn (+7.2%) in Q3 2019 and €11.3bn (+6.9%) across the year to date.

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