almost 4 years ago • 2 mins
The hills were alive with the sound of Vivendi’s first-quarter update on Monday – as well as the unmistakable sound of the French media conglomerate’s stock ticking up 4% 🔊
Consider Vivendi a born-again Belieber, because the company reported last quarter’s sales were more than 4% higher than the same time last year – and it had Universal Music Group, home to hit-maker J-Biebs, to thank. Despite the industry-wide decline in music streaming, new releases drove sales in that part of the business up 13% from a year ago 🎶 But even Justin’s healing touch couldn’t innoculate Vivendi from the impact of coronavirus: its ad business earned 3% less revenue last quarter than a year ago, and the company said this quarter – if not the rest of the year – would be impacted too.
Vivendi’s cable television business, Canal+, grew revenues as well. But investors might be more interested in how it does this quarter, when people could be stuck inside from start to finish – especially since it’s only just launched Disney+ in France 🏰 The government-delayed launch gave Netflix longer in the country with less competition, and the US streaming giant’s investors will now want to see if more time indoors benefits all the big streaming names, or if tightening consumer budgets forces the company to go head-to-head with the Mouse House.
Vivendi’s ad agency is likely to struggle as brands rein in their spending amid the ongoing health crisis. Some might even cut out the middleman altogether and manage their ad campaigns themselves on Facebook or Twitter – though probably not enough to offset the more than 40% declines in ad spending the industry’s seen so far 📉 That means those ad platforms – and the likes of Google-parent Alphabet – might find their long-standing love affair with investors challenged as their earnings come under pressure this year.
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