Arguments both for and against Universal Music Group‘s proposed $775 million acquisition of Downtown are getting louder.

On the ‘against’ side, via lobbying body IMPALA, we’ve seen the thorny subject of UMG’s market share in Europe rear its head twice in recent weeks.

Two separate claims about UMG’s European market share from IMPALA have contradicted my own calculation from earlier this year.

In that calculation, based on IFPI data, I suggested Universal’s distribution market share in Europe in 2024 stood “close to 31%“.

A few of you have contacted me to ask if I got my numbers wrong. (Spoiler: No, I did not!)

So I thought I’d do the sensible thing: get even more granular on the math(s) behind my IFPI-informed methodology, and show you the working.

First, though, let’s cover IMPALA’s two claims:

IMPALA Claim 1 (ex-UK): Helen Smith, June 25

IMPALA chief, Helen Smith (pictured inset), claimed in an op/ed, citing an unnamed data source, that “UMG’s share [in Europe was] 18% higher” in 2023 than it was in 2012.

Smith said these figures represented Europe “excluding the UK”, and did not reflect recent additions to UMG’s stable, including [PIAS].

Smith’s stats surprised many – particularly as Universal has been fiercely challenged by the rapid growth of indie distributors in Europe in the streaming era. (For example: Believe across the EU, and Amuse in its home nation of Sweden).

What’s more, in 2012, regulators blocked UMG from buying many significant indies in the EU for a full decade — a condition of Universal’s purchase of EMI Music.

Last week, the co-CEOs of Virgin Music Group, Nat Pastor and JT Myers, publicly denounced Smith’s numbers, stating: “There is ZERO credible data to support [Smith’s market share claim]… It’s not true.

“The reality is that during this period [in Europe] the independent sector’s market share has grown materially, while UMG’s market share has not.”

IMPALA Claim 2 (inc UK): Open letter, July 7

Earlier this week, IMPALA issued an open letter, addressed to the EC, that contained more market share stats.

Data was cited from Omdia, the oft-quoted company behind the Music & Copyright publication.

According to IMPALA, Omdia’s new stats suggest that Universal Music Group “controls over 40% of the recorded music market [in Europe] – nearly double the second biggest player”.

This is a notable claim because… guess what? The EC says: “If a company has a market share of less than 40%, it is unlikely to be dominant.”

Interestingly, the small print of the IMPALA letter showed that Omdia’s dataset differed from that of Helen Smith’s.

Omdia’s stats, it said, were for 2024 (rather than 2023), and were based on the trade revenues of seven European countries including the UK.

The other nations covered were Germany, France, Italy, Spain, the Netherlands, and Sweden.

How I got to ‘close to 31%’…

Now allow me to explain why I continue to believe a ~31% market share estimate for UMG in Europe (2024) is based on solid data.

Step One

UMG has previously published a statistic for its annual Recorded Music (RM) revenues generated in Europe in 2024.

Some quick things to know:

• MBW has confirmed that ‘Europe’ here includes the EU plus the UK.
• In fact, ‘Europe’ in UMG’s 2024 numbers really refers to EMEA: Europe, the Middle East & Africa. (Or, to be perfectly accurate: Europe + the UK + those countries in the Middle East and Africa where UMG has operating companies.)
• The non-Europe/UK contribution to this EMEA revenue figure is nominal.

According to UMG’s annual report, this Europe/EMEA territory generated 28% of UMG’s Recorded Music revenues in 2024.

Indeed, Universal has provided investors with the precise annual revenue figure it generated in this territory last year: EUR €2.525 billion.

Step Two

This bit’s easy.

First we have to convert the EUR €2.525 billion that UMG generated in Europe (EMEA) last year into USD – based on the IFPI’s chosen average annual exchange rate for 2024: 0.92 USD per 1.0 EUR.

That leaves us with UMG’s total annual USD Recorded Music revenues in Europe/EMEA last year: USD $2.744 billion.

Some other quick things to know:

• UMG’s RM revenues do not include merchandise. They include streaming, downloads, physical sales, and ‘Licensing & Other’*.
• The latter category is primarily comprised of sync revenues and public performance revenues, which the IFPI also includes in its trade revenues.

Step Three

Next up, we need the total recorded music trade revenue figure for Europe in 2024 from the IFPI, which is printed in the trade body’s latest Global Music Report.

The GMR is a paid-for premium report. Being sensitive to that, I’ll only print a rounded approximation here: USD $8.7 billion.

(In reality, I have a more precise number for total trade revenue for Europe from IFPI, covering 27 territories including: UK, Germany, France, Italy, Netherlands, Spain, Sweden, Switzerland, Poland, Belgium, Denmark, Austria, Norway, Finland, Ireland, Czechia, Greece, and Portugal.)

Step Four

Nearly there!

Now we just have to calculate UMG’s 2024 recorded music revenues in Europe (USD $2.744 billion) as a percentage of the IFPI’s official total trade revenues in Europe.

That comes out to… 31.5%.

That’s my market share estimate for Universal Music Group in Europe in 2024, based on IFPI data.

(And remember, technically that’s UMG’s share of EMEA: Europe + UK + selected territories in the Middle East and Africa. Which means the real UMG market share number for just Europe + the UK would be slightly lower.)

The next steps…

I’ve also followed the above process for a few other relevant years to illustrate how UMG’s European market share has declined over the past decade, not least thanks to the rise of indie distributors.

Let’s start with 2023 – the year before UMG acquired [PIAS].

Giving you the quick version of the same steps I walked you through above:

• Universal Music Group’s recorded music division generated USD $2.60bn (EUR 2.392bn) in Europe in 2023***;
• That $2.60 billion was worth a 32.5% market share of Europe (including the UK) in 2023, based on IFPI’s annual trade revenue total for the region ($8.0bn).

Now, for completeness, let’s go right back to 2013: the year after Universal acquired EMI Music.

• According to the IFPI Global Music Report for that year, Europe’s recorded music business in 2013 generated USD $5.4 billion in trade revenues;
• According to then-UMG owner Vivendi, Universal Music Group’s annual revenues (global) weighed in at USD $5.322 billion (EUR €3.992bn);
• Of that global figure, said Vivendi, 40% was generated in Europe, equivalent to USD $2.129 billion;
• Based on the relevant IFPI figure, this equated to an approximate 39.4% market share in Europe for UMG.

Yeah, like, tell me all of that in a sentence…

According to these stats, Universal Music Group’s annual Recorded Music market share in Europe (including the UK) in the eleven years between 2013-2024 declined by approximately 790 basis points.

At the end of this period, in 2024, Universal’s market share in the EU plus the UK stood at 31.5% – a long shot from the EC’s self-established 40% market dominance threshold for M&A activity in Europe.

Notes:

* UMG’s ‘License & Other’ category in its reported Recorded Music revenues also includes ticketing, sponsorship, film and TV production, and certain other revenue. This would only serve to inflate UMG’s market share in the estimates above.

** In each new edition of its Global Music Report, the IFPI retrospectively adjusts industry revenue results from previous years to show constant currency growth/decline in the industry. Universal Music Group does not do this in its fiscal results (obviously), so every IFPI-based estimate used in this analysis is based on the latest IFPI figures from the GMR in the year in question.

*** For 2023, Universal Music Group published a revenue figure for its RM turnover in Europe of EUR €2.392bn. This has been converted into USD at the rate given in the relevant IFPI Global Music Report.Music Business Worldwide