(Reuters) -Universal Music Group on Thursday reported first-quarter earnings that comfortably beat expectations, helped by the record-breaking success of its star act Taylor Swift.
UMG (AS:UMG) executive were also upbeat about the label's new deal with TikTok, also announced on Thursday, which settled a dispute over artist pay and helped address wider artificial intelligence concerns in the industry.
UMG, the world's biggest music label, posted adjusted core earnings (EBITDA) of 591 million euros ($632.6 million), up 15.9% year-on-year and above the 567 million euros expected by analysts in a Visible Alpha consensus shared by the company.
The commercial success of Swift has boosted the group's earnings through royalties from streaming, album sales and concert tickets.
Taylor's Eras Tour, consisting of 152 shows across five continents, has generated more than $1 billion in ticket sales, making it the world's highest-grossing concert tour. And her new album, released in April, is dominating the charts.
Other top sellers in the quarter were Noah Kahan, Morgan Wallen, Ariana Grande and Olivia Rodrigo, UMG said.
TIK TOK DEAL "AN IMPORTANT STEP FORWARD"
Earlier on Thursday, UMG and TikTok said they had reached a new licensing agreement that will restore the label's songs and artists to the social media platform.
Management told analysts on a call that the deal addresses the issue of artists' compensation, but did not disclose specific figures.
Prior to the agreement, UMG made about 1% of its global revenue from partnering with the short-video app.
"There are of course other aspects to economic value of any deal that don't necessarily show up in the revenue line, including things like e-commerce, ad credits, data marketing programs, other important facets of the platform relationship that we have with TikTok," said Chief Digital Officer Michael Nash.
He added that AI concerns, whereby artists' identities are misappropriated, were also addressed in the deal, saying, "So this is an important step forward."
Sales in the quarter grew 7.9% in constant currency terms to 2.59 billion euros, helped by growth in all of UMG's business segments.
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