Vivendi Earnings Up on Strength of Universal Music Group
Strong streaming from Drake, Post Malone boosted yearly revenues for the media company, while StudioCanal was down slightly without a Paddington film.
Vivendi's yearly revenues received a big boost, up over 11 percent, on the strength of Universal Music Group hits such as the Star is Born soundtrack, in annual results released Thursday.
Releases from Drake, Post Malone and XXXTentacion and the Lady Gaga-led soundtrack were 2018's biggest sellers for UMG. Revenue was up due to streaming, which climbed 37.3 percent on subscriber growth and stronger market share. That uptick offset the company's 23 percent decline in downloads and 16 percent decline physical sales.
Streaming also drove 14.5 percent growth in music publishing revenues. This comes after UMG announced it will acquire music distribution and rights management company Ingrooves as part of its efforts to strengthen its marketing and artists services.
Vivendi is still seeking a strategic partner to snap up half of UMG. No announcements were made on that front, but the company has entered into due diligence as it searches for partners and expects to announce its suitors in the coming weeks. Vivendi CEO Arnaud de Puyfontaine has said the company will use the cash from the sale to fund stock buybacks and make additional acquisitions.
StudioCanal remained relatively steady, down less than one percent, at 462 million euros ($521 million). It was hurt by the lack of a major global hit, such as last year's Paddington 2, but buoyed by growth in its TV division and successes on its French films, including Sink or Swim, which racked up 10 Cesar nominations, and In Safe Hands, which won the best acting prize for star Elodie Bouchez at the Lumiere Awards.
The CanalPlus pay-TV division also remained relatively level overall, adding 654,000 global subscribers to its roster, while France lost 300,000 subscribers. Those mostly came from the now-defunct Canalplay SVOD, which sank under increased competition from Netflix in the country. Netflix now boasts more than 5 million subscribers in France.
The company cited its new deal in France, which will shorten the waiting time on taking films from cinemas to the small screen and which the company struck in November, as a sign of hope. CanalPlus, which funds films in France, will now be able to screen movies six months after their theatrical release, which it believes will help fight off its streaming rival.
In the gaming division, revenues were slightly up 2.1 percent on the strength of OTT sales across Apple, Google, Microsoft and Amazon. Those platforms represent upwards of 72 percent of Gameloft's sales pie, offsetting losses on telecoms and ad sales.
Asphalt 9: Legends was Vivendi's strongest release in 2018, with more than 35 million downloads since its release in July. Catalog games, including Disney Magic Kingdom, were “particularly resilient” and accounted for 47 percent of sales.
Ticketing revenues were up 10 percent to 58 million euros ($65.4 million), following the acquisition of Paylogic last April.
Vivendi also saw growth boosted 6.5 percent in its Havas ad division on the strength of the U.S., U.K, and France, despite a slowdown in China. It continued its spree of snapping up agencies around the world, and also acquired French publishing house Editis, closing that deal on Jan. 31.