French conglomerate Vivendi saw its revenues increase by close to 14% during the first half of 2019, to just over $8 billion. This growth was due in large part to the company’s music division—namely Universal Music Group (UMG).
UMG’s first-half 2019 earnings clocked in at $3.7 billion, an 18.4% increase. Moreover, music-streaming and subscription profits jumped quite a bit and were strong enough to offset double-digit drops in both physical album sales and album downloads.
A few albums, in particular, contributed to this streaming growth — namely Ariana Grande’s Thank U and the soundtrack to A Star is Born, which received critical acclaim and earned over $430 million on a $36 million budget.
Despite these figures and the fact that UMG boasts world-renowned clients like Drake, Lady Gaga, and Taylor Swift in its ranks, Vivendi is still in the process of selling half the label. While details and specifics haven’t yet been ironed out, nosebleed analyst estimates put UIMG’s valuation in the ballpark of $50 billion.
Of course, it’s entirely speculative whether anyone will bite at that price tag, especially with lots of rumored terms and conditions attached. But the time to dump part of the crown jewel is right now — and diva demands are best issued with lots of leverage.
Other Vivendi brands fared comparatively poorly during the first half of the year.
Canal+, a premium television station that’s available to subscribers in France, saw its revenues drop by 2.2%. Gameloft, Vivendi’s video-game company, experienced a 5.2% decrease in profits.
On the other hand, Dailymotion, a video-sharing platform, posted a revenue increase of 8.5%, to $38 million, during 2019’s first six months. However, the website was also fined $6.1 million by Italy’s Court of Rome; the fine was issued after Dailymotion was found to have failed to remove content that’s owned and copyrighted by an Italian company. Because of the ruling’s implications for other copyright-infringement cases against Dailymotion, analysts anticipate that the company could pay over $200 million in fines.
Though Vivendi seems committed to selling half of UMG, business plans are commonly updated; perhaps a “refresh” of sorts is in order, given that UMG just earned such a large portion of its total valuation.