EDM specialist SFX Entertainment’s revenue increased 56.6% to $52.2 million in the first three months of 2015, despite start-up costs for Rock in Rio USA of $4-5m according to Music Week. SFX produced and promoted 251 festivals and events in the period, attracting more than 751,000 fans, including 12 festivals with capacities of over 10,000. Live revenue of $40.2m accounted for 77% of total earnings, while net loss was $41.6m, compared with $56m year-on-year. SFX expects revenues for the year to be around $500m. Its digital dance music service Beatport sold $11.7m of music downloads in the first quarter of 2015, slightly up on $11.6m in the same period last year. Its "sale of products" revenue came to $12.2m. SFX chairman and CEO Robert FX Sillerman said: "The progress SFX continues to make with our operating initiatives, including the successful re-launch of Beatport as the leading mobile and streaming app for EDM fans around the world, reinforces my belief that value is being created in the business".
Universal had posted an 8% rise in digital music income in the first quarter of this year (Q1 2015) to €459m. UMG said recorded music revenues grew 2.4% and the growth in subscription and streaming revenues more than offset a decline in both digital download sales and physical sales. Music publishing revenues (at UMPG) grew 3% (13% in actual terms) to €184m, also driven by ‘increasing subscription and streaming revenues’. UMG’s overall revenues – across recorded music, publishing, merchandise and more – were up 11.6% year-on-year in Q1 to €1.1bn.
Interestingly and given the news that Apple has allegedly been pushing the major labels to clamp down on 'freemium' streaming services - Warner Music Group’s CEO Stephen Cooper broke ranks with Sony and UMG to encourage the recorded music industry to exercise caution when it comes to dismissing the value of ad-funded music services saying "First of all, there are a lot of models out there, and all of those models — ad-based, subscription-based, or with both — are better than piracy" addng “You know to be crystal clear, piracy is zero revenue, it’s the theft of intellectual property, and it’s not good for anyone. So all of these models are better than piracy, that’s number one" and “Number two, the freemium models, if they encourage the adoption of subscribers… form ad-based [paths] to subscription-based models over time. We at Warner believe that’s good news". Cooper went on to say he would like to see the move from ad based streaming to subscriptions models to be 'turbo charged'.
Live Nation’s revenue for the first quarter of 2015 fell year-on-year, but the company recorded growth in a number of areas. Revenue was down 0.6% to $1.12 billion for the three months ending March 31, but increased 4% on a constant currency basis, led by strong growth in its ticketing business, while sponsorship and advertising revenue rose by more than 20% in both categories. Net loss more than doubled to $66.5 million from $30.2 million. The firm is staging around 20 of the top 25 global tours, including U2, Maroon 5 Luke Bryan and Ariana Grande and Live Nation president and CEO Michael Rapino said: “2015 is shaping up to be another year of growth and record results for the company, and we remain confident we will deliver the final year of our three-year plan."
