Exploration Weekly - YouTube Q4 Ad Revenue Up 46% / Spotify Podcast Listening Nearly Doubled / Tencent Acquires Further 10% in UMG

Aaron Davis -


“There comes a time when the world gets quiet and the only thing left is your own heart. So you'd better learn the sound of it. Otherwise you'll never understand what it's saying.”

Sarah Dessen

Based on the latest financial numbers published by Google and parent company Alphabet, YouTube’s advertising revenues hit $6.89 billion in Q4 2020, up 46% year-on-year. That number accounted for just over 12% of Alphabet’s overall revenues of $56.9 billion for the quarter.

In the same quarter of 2020, Spotify announced that 25% of its total user base engaged with podcast content in the period, and podcast consumption nearly doubled year-over-year. The company also reached 155 million Premium subscribers - up 24% - adding a record 30 million for the year.

A consortium led by Tencent acquired an additional 10% in Universal Music Group (UMG) as announced last week. This takes the Tencent consortium’s holding in UMG from 10% to 20%, and reduces UMG parent Vivendi’s ownership stake in the music firm to 80%. Vivendi hinted that the proposed IPO of UMG could happen this year, or in “early 2022 at the latest”.

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Compiled by Heidi Seo

Exploration Weekly - February 05, 2021

YouTube Advertising Revenues Grew 46% to $6.9 Billion in Q4 2020

According to the latest financial numbers by Google and YouTube’s parent company Alphabet, YouTube ads made $6.89 billion in the final quarter of 2020, up 46% year-on-year. That means YouTube advertising accounted for just over 12% of Alphabet’s overall revenues of $56.9 billion for the quarter. There was no new figure for the number of YouTube Music and YouTube Premium subscribers, however: SVP and chief business officer Philipp Schindler repeated the 30 million figure that YouTube announced in September 2020 when asked, as well as the “in 2019, YouTube paid the music industry over $3 billion” statistic that the company has cited before.

Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled

Spotify reached 155 million Premium subscribers (up 24%) in the fourth quarter of 2020 - adding a record 30 million for the year. The audio streamer’s total users grew 27%, to 345 million in Q4, after netting 74 million in 2020, also a record. The company touted its podcast strategy. As of Q4, Spotify had 2.2 million podcasts on the platform. The company said 25% of its total user base engaged with podcast content in the quarter. In addition, podcast consumption hours in Q4 nearly doubled year-over-year. Spotify exceeded Q4 financial targets for revenue with total sales up 24% (excluding the impact of foreign exchange rates) and gross margin. The company saw particular strength in ad sales, which grew 39% in the quarter (on a constant-currency basis). For Q1 2021, the company is projecting total users of 354 million-364 million and paid subscribers of 155 million-158 million.

Universal Music Group IPO Coming “Early 2022 at the Latest”; Tencent Completes Acquisition of Further 10% in UMG

A Tencent-led consortium has completed its acquisition of an additional 10% in Universal Music Group (UMG), both Tencent and UMG parent Vivendi announced last week. As previously announced, the Tencent consortium has acquired the shares in UMG for €3 billion based on a €30 billion enterprise valuation of the music company. The acquisition takes the Tencent consortium’s holding in UMG from 10% to 20%, and reduces UMG parent Vivendi’s ownership stake in the music firm to 80%. Vivendi also suggested that the proposed “spin-out” IPO of UMG could happen this year. “Following the success of this significant strategic transaction, a UMG listing is planned in early 2022 at the latest,” announced Vivendi.

SiriusXM Ended Pandemic Year with $8 Billion in Revenue, Bump in Subscribers

SiriusXM posted record revenue of $8.04 billion in 2020, a 3.2% improvement from 2019. On January 8, the company revealed its subscriber growth for 2020 and warned its income statement would take a non-cash hit from a write-down of Pandora’s book value. In recent years, SiriusXM has expanded beyond its core satellite business and into streaming with acquisitions Pandora and Stitcher and an investment in SoundCloud in February. Results have been mixed even though overall revenue continues to grow. Pandora, acquired in February 2019 for $3.5 billion, complements the satellite service and gives SiriusXM's 360L in-car entertainment platform an Internet service. But Pandora has struggled, gaining 138,000 subscribers - a 2.2% increase - but losing 8.5% of its 66.6 million monthly users since the acquisition in the first quarter of 2019. Coupled with growing royalty costs, Pandora's shrinking listener numbers caused SiriusXM to write down the platform's book value by $976 million in the fourth quarter.

Spotify Finally Launches in South Korea, But With No Free Tier

Spotify officially launched its service in South Korea. The service is available to download for Premium Individual and Duo plans only, according to Spotify, which means no ad-supported Free tier. New listeners can try out Spotify Premium for seven days free on their mobile phone with no credit card information. Alternatively, they can sign up for a three month free trial, if they volunteer their credit card information and subscribe before the end of June 2021. The launch in South Korea, the world’s sixth-largest music market according to the IFPI, brings Spotify’s total number of active markets to 93. The streaming service says that the share of K-Pop listening on the platform has increased by more than 2,000% since it debuted its first K-Pop playlist in 2014.

PRS Changes Its Livestreaming Licensing Rules After Massive Indie Backlash

In the initial January 27 release, PRS for Music officially launched a licensing platform for small-scale livestreams in the UK. The corresponding licenses cover public performances as well as associated sync and mechanical licenses and are available only for remote gigs that bring in £500 ($684) or less. Under the original pricing structure, livestream shows with earnings of £250 or less cost £22.50 to license, while those that generate between £251 and £500 will set applicants back £45. Many quickly pointed out that a remote performance that attracts fewer fans (and smaller revenues) than expected could cause the artist at hand to more or less pay to play. As a result, livestream licenses are now free for musicians who wish to host “an online ticketed live concert exclusively of their own works”. As before, however, the gigs must bring in under £500 to qualify for the license, and the rule change will remain in effect “throughout the period the live sector is forced to close due to the COVID-19 crisis where the qualifying member is the performer.”

Random Ramblings

  • Spotify eyes music-recommendation based on your mood through speech-recognition technology.
  • The most expensive record ever sold has never been heard.
  • The brightest minds behind the biggest hits.
  • Why are K-Pop groups so big?
  • Faouzia & John Legend forge a stellar duet with "Minefields".

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