Success of 'Paddington 2' Boosts Vivendi's StudioCanal

'Paddington 2'

The little bear led revenues for Vivendi's film division, while Drake, Post Malone and the Black Panther soundtrack sales delivered for Universal Music Group.

StudioCanal and Universal Music Group led French giant Vivendi in a strong third quarter, with revenues up 5.6 percent to $3.79 billion (€3.34 billion). Revenues for the first nine months of the year were up a strong 13.6 percent to $11 million (€9.8 billion), driven by the film and music divisions.

Family-friendly sequel Paddington 2, starring Hugh Grant and Ben Whishaw, boosted StudioCanal revenues 10.3 percent. With no big English-language release this holiday season, the studio is predicting a downturn but highlighted the strength of its French feature releases and TV sales of spy thriller The Bureau as positives.

Streaming hit a high note for Universal Music Group (UMG), driving growth up 13.5 percent to $1.69 billion (€1.5 billion) and offsetting its 25 percent decline in download sales. Drake, Post Malone, XXXTentacion and Migos as well as the Black Panther soundtrack from Kendrick Lamar were huge hits for the group, driving recorded music sales up 10 percent.

The company is going ahead with its plan to sell off part of UMG but noted that it has yet to select banks to move that process forward. It will narrow its selection of banks to seek buyers, but that winnowing will happen after its yearly results are released on Feb 14, 2019. 

The French giant is looking to sell part of UMG to a strategic partner, making its pockets even deeper for more potential acquisitions after unloading its shares of Ubisoft for $566 million (€500 million).

The conglomerate is also betting on print, finalizing the acquisition of French book publishing house Editis for $1 billion (€900 million). While the move might seem counterintuitive in these internet-dominated days, Vivendi noted that books are the leading cultural market in France ahead of cinema and music with $6.7 billion (€6 billion) in revenues in 2017. It sees the acquisition of a publishing house as part of its long-term strategy to become a content powerhouse, developing intellectual properties and franchises for StudioCanal and breaking into the lucrative audiobook market.

The company is also stemming losses at its pay TV CanalPlus group, mostly on the strength of soccer's World Cup earlier this year, reducing its subscriber churn rate by 4 percent. Despite increased competition from Netflix and Amazon killing its Canalplay SVOD service, CanalPlus subscription increased 227,000.

The channel will continue to focus on live events to lure subscribers, after scoring the English Premier League rights away from Altice for $130 million (€115 million) per season. It also finalized an agreement with French network TF1 to offer its programming globally.

The gaming sector was down nearly 5 percent with Gameloft hit by advertising revenue losses. Sales across Apple, Google, Microsoft and Amazon stayed strong and made up 72 percent of sales, racking up 2 million downloads a day. Racing game Asphalt 9: Legends sped to the top with 24 million downloads in three months.

As DailyMotion continues to try to distinguish itself as an upscale YouTube, video views doubled year-on-year to 2.2 billion in the quarter with 270 million unique viewers worldwide. Again betting on live events, the group has signed deals with soccer team AC Milan and the European basketball league EuroLeague.

In its Vivendi Village live-events group, its online ticket sales platform revenues were up 5.5 percent to $41 million after acquiring Paylogic. Havas advertising group was also up 2.5 percent, as it continues to acquire ad agencies in the U.S. and Australia, and predicts a strong fourth quarter after landing Puma.