Good evening, and welcome to Universal Music Group's third quarter earnings call for the period ending September 30, 2022. My name is Nadia, and I'll be your conference operator today. Your speakers for today's call will be Lucian Grainge, Chairman and CEO of Universal Music Group, and Boyd Muir, Executive Vice President, CFO, and President of Operations. They will be joined during Q&A by Michael Nash, UMG's Executive Vice President, Digital Strategy. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. Please let me remind you that management's commentary and responses to questions on today's call may include forward-looking statements, which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may vary in a material way. For a discussion of some of the factors that could cause actual results to differ from expected results, please see the Risk Factors section of UMG's 2021 annual report, which is available on its website at universalmusic.com. Management's commentary will also refer to non-IFRS measures on today's call. Reconciliations are available in the press release on the investor relations page of UMG's website. A supplemental historical revenue fact sheet is also available on the investor relations page of UMG's website. Thank you. Sir Lucian, you may begin your conference. Thank you, and thank you all for joining us. Today, I'm pleased to report that Universal Music Group's third quarter was another quarter of strong growth. Our fifth consecutive quarter of strong growth as a standalone public company. Revenue was up 13% in constant currency and adjusted EBITDA increased by 9%. I believe these results demonstrate how successful we've been at diversifying our revenue streams. By creating and assembling a broad-based and strategically integrated portfolio of businesses, we are better positioned to navigate the inevitable ebbs and flows in revenue of any particular business, as well as to weather the macroeconomic headwinds, adapt to changes in formats and consumer habits that we see, and to seize opportunities in new and emerging categories. Here's just one example of what I mean. When we reported earnings for the second quarter, we noted we would not be immune to a downturn in the advertising market, which is indeed what happened in the third quarter. The ad-supported streaming revenue grew 5% in constant currency. The slower growth in the third quarter in ad-supported streaming revenue was offset by growth in so many other areas of our business, from subscription to licensing, live touring, to merchandising, to continued growth throughout music publishing, and even by legal settlement with an internet service provider which delivered positive outcomes for our artists as well. Over the longer term, we believe UMG's streaming performance will benefit from overarching trends, such as the increasing migration of advertisers to the digital space, especially to social media and obviously video. Our strategy goes far beyond positioning our company to passively benefit just from trends. Rather, we are catalysts for change, driving innovation, finding new ways to leverage our existing assets, creating new business models, all of this in service to our artists, advancing their careers creatively and commercially, while at the same time growing the larger music ecosystem. Before Boyd gives you a detailed picture of the numbers, I want to highlight a few areas we're especially proud of and expect even greater results going forward. How our diversification strategy is playing out internationally, our recent innovations in business models, and some technological advances we're particularly excited about. Let me begin in Japan. Japan is the world's second-largest music market by revenue. In that fragmented market, a market in which the majority of sales are still physical, the performance of Universal Music Japan has been outstanding. Our competitive position has risen sharply, and we are working to drive the adoption of streaming, which represents an extremely significant opportunity there. We're building on our consistent success in domestic sales of local artists as well as global superstars by also exporting the best Japanese talent to the rest of the world. In that regard, we recently announced an expansion of our relationship with Japan's leading talent management company, Johnny & Associates, which represents superstars King & Prince, already on Universal Music Japan. We've now signed a new band with them, Travis Japan, a promising boy band with plans to launch the group globally through our Hollywood-based Capitol Records. That launch will be the first artist to initially be digitally only, bringing one of the hottest new J-pop groups to streaming platforms worldwide. In India, as we're doing in Japan and other markets around the world, we are building out our company not only to be a leader in recorded music and publishing, but also to engage in the business of artist management, live events, and brand sponsorships. In September, we announced the acquisition by Universal Music India of a majority stake in TM Ventures, one of India's leading music and entertainment companies. Universal's leadership of the domestic Indian non-film music business will accelerate while TM clients will have access to and the benefit of the resources of UMG India locally, as well as UMG globally. Recent proof of our global reach was Apple's use of the track VooDoo in its launch of the next generation of AirPods, a track by Badshah, an artist signed to us last year, who has since also become a TM client as well. Expanding into artist management is nothing new for us. In 2007, during a time when piracy in Latin America was still decimating the traditional recorded music revenue, we launched a management division called GTS. Today, in seven markets in Latin America and Iberia, GTS enables us to build multifaceted long-term relationships with local artists in management, live, and branding. Through these partnerships, we started to build long-term relationships that allowed us to get ahead of the Latin music explosion and forge lasting, multifaceted relationships with some of the biggest Latin artists, including J Balvin, David Bisbal, and Sebastián Yatra, among many others. Turning now to new business models, I want to stress how much their development and exploitation are absolutely central to our entrepreneurial culture. In that innovative spirit, we have announced the creation of Virgin Music Group, which represents a significant acceleration of our independent label and artist services strategy. This new global division unifies three entities, UMG's Virgin Music Label and Artist Services, Ingrooves, our industry-leading global distribution platform, and UMG's recent acquisition, the Artist Partnerships division of mtheory, a company that provides a range of marketing and advisory services to independent artists. To serve as co-CEOs of this new Virgin Music Group, we've appointed mtheory founders, JT Myers and Matt Pincus. Matt and JT will lead the expansion of our independent music capabilities across all our business units and regions. At inception, Virgin Music Group is the only independent distribution company that has a truly global presence with boots on the ground in major markets around the world, including the U.S., U.K., Japan, Germany, France, and Latin America, as well as more than a dozen markets in Europe, Australasia, Africa, and Latin America. This is not top-down distribution offering, but a truly global organization that offers a world-class continuum of services, artist development, marketing, promotion, strategic insights, to name just a few. We're independent artists and entrepreneurs with a level of hands-on expertise and resources that is unique to the industry. Whether an artist is DIY, independent, or major, they can partner with us at every stage of their career, moving along this continuum of services as their career progresses. I'm particularly passionate about Virgin Music Group because I firmly believe that leveraging our world-class infrastructure to work with independent artists, labels and, obviously, entrepreneurs, presents a significant opportunity for UMG. First, the approach spurs overall growth in the developing music markets. Second, by increasing our artist touch points, this strategy will bring us many benefits from artist discovery and A&R to data and analytics, while also lowering the risk profile of our capital allocation and improving operating leverage against certain fixed costs. Many of our most successful artists, The Weeknd, Taylor Swift, and Drake, to name just a few, started as independent artists working with us via a distribution deal, whose relationships with UMG then evolved into multi-rights deals covering many aspects of their careers. One of the many reasons we've become such a powerful magnet for artists drawn to UMG as their home is our relentless drive to discover new talent all over the world and the innovative ways we employ just to do that. For example, last week, we announced a new music initiative called StemDrop, a partnership with Simon Cowell's Syco Entertainment with TikTok. StemDrop allows TikTok's community of over one billion users to collaborate with iconic songwriters like Max Martin to create new versions of tracks written specifically for the program. UMG and Republic Records will have the exclusive right to sign creators that are discovered through this initiative. This highly innovative project harnesses the scale of TikTok while leveraging the artistry of creators worldwide. Our years of experience with emerging platforms has made it clear that experiments like StemDrop often provide the most productive route for us to continue to lead the commercial evolution of the music ecosystem. At the same time, our track record of innovation is not limited to our partnerships with platforms. Within UMG itself, we have some of the world's leading experts in data and analytics, consumer insights, sound recording, and consumer audio products. These individuals are creating some of the most exciting and transformative technologies for years to come. We'll change the way fans enjoy music. I'd like to give you two examples. The first involves Ingrooves, which, as I mentioned earlier, is now part of Virgin Music Group. Ingrooves, a world leader in music distribution, marketing, and technology, was recently issued its third in a series of U.S. patents that are transforming the way artists reach new audiences and sustain listeners in today's engagement economy and increasing streams on leading VSPs. The new patent extends the capability of detection technology to short-form video platforms such as TikTok, YouTube Shorts, and Instagram Reels. The technology enables artists and labels to analyze early trends to determine which user-generated content, UGC, will be highly likely to migrate to digital streaming services. This patented invention will give a head start that is additional lead time for marketing activities even before significant growth in streaming occurs by spotlighting those particularly clear opportunities to grow audience on digital streaming services such as Spotify and Apple Music. The technology will be available to Ingrooves clients and will also be leveraged as part of UMG's proprietary A&R and marketing services. The second example involves our work in immersive audio. UMG has been working for years with Dolby on the development of what is the single most important evolution in music listening in decades. Immersive audio, a real breakthrough in technology that dramatically improves the listening experience for consumers. Dolby's immersive audio format, branded Atmos, creates a music experience unlike anything that has come before. This new format not only lets us reinvigorate classics from our vast industry-leading catalog, but offers artists such a much wider sonic palette, which they will be able to express themselves in the future. An advancement of this significance was no easy feat. It required years of investment and innovation, building state-of-the-art recording studios within our network of iconic studios, including Capitol Studios in Hollywood and Abbey Road Studios in London, and then training some of the world's top engineers in how to take the best advantage of it. We have also been conducting an extensive campaign to educate artists and estates about the limitless creative opportunities that immersive audio provides. Now we're seeing the results. Today, UMG has delivered Dolby Atmos music versions for 80% of our top 50 streaming artists, and nearly half of UMG's streaming consumption has Atmos mixes available, and fans can't get enough. Our global insights team found through our proprietary consumer research that already 50% of Apple Music subscribers listen to Spatial Audio, Apple's version of immersive audio, with Gen Z subscribers over-indexing at nearly 67%. The consumers who experience it love it, with eight out of 10 saying that it's much better quality than traditional stereo audio, and 90% saying they will likely listen to artist's music longer if it is in Spatial Audio. As opportunities to experience this groundbreaking technology increase, so will consumer adoption. Earlier this month, UMG, along with Apple and Mercedes-Benz, announced that Mercedes will be the first automaker to natively offer Spatial Audio with Apple Music, and we expect similar announcements to follow from other automakers soon. Analysts have estimated that the connected car represents a more than $10 billion opportunity for services, including music, so we are deeply engaged with the other leading car manufacturers to enhance music listening in their vehicles. Moreover, spatial audio is not limited to the car or home audio systems, as new headsets from Apple, Sony, Samsung, and many others will increasingly incorporate the technology and make the immersive experience available to hundreds of millions of consumers. Research from Agora found that 80% of Gen Z users would be willing to pay more for headphones if those devices support spatial audio. As we look to some of the most eagerly anticipated albums from music's biggest stars, two perfect examples come to mind. The Beatles' 1966 masterpiece, Revolver, will be released for the first time in immersive audio tomorrow. Taylor Swift's Midnights was released last Friday in Atmos, and it already broke the all-time record for the biggest album released in spatial audio on Apple Music worldwide and the biggest pop album of all time on Apple Music by first-day streams. In addition, Midnights was the biggest album debut for Spotify ever and also remarkably broke the all-time record for the most single-day streams for an artist in Spotify history, surpassing the record set by Bad Bunny earlier this year. On Amazon Music, Taylor received the most Alexa requests ever, and on YouTube, the single Anti-Hero is the number one trending video in the U.S. Before I turn things over to Boyd for a dive into the financials, let me leave you with one closing point. Driving this level of innovation, diversifying revenue streams, developing new business models that work for our artists as well as for our partners, creating new ways of identifying and marketing artists, significantly enhancing the very quality and value of the music we deliver to consumers. All that requires vision and imagination, and years of hard work and commitment by the most talented teams in music to make them a reality. Efforts like the ones I've talked about today, and many others, frankly, that I haven't been able to mention, are essential to delivering long-term sustained growth to UMG and to the broader industry. Even as we continue to deliver strong quarterly results, we remain focused on building an organization that will drive meaningful growth and shareholder value, not just for the next quarter or the one after that, but over the long term for years to come. Our focus on the future has enabled us to successfully navigate some of the industry's most challenging times, and I've been there, and I'm confident that focus will keep us on track to an even brighter future for our artists, their fans, and our shareholders alike. Thank you. Boyd Muir, can I pass over to you? Thank you. Thank you, Lucian. As Lucian just mentioned, the diversity of our revenue streams allowed us to generate solid third quarter results. As usual, all of the growth figures I'll discuss today will be in constant currency. UMG's revenue for the quarter of just under EUR 2.7 billion grew 13% and adjusted EBITDA of EUR 553 million grew 9%. This included a EUR 72 million settlement from a copyright infringement lawsuit with an Internet service provider, which is included in other digital revenue. In addition, there is a negative impact of EUR 21 million related to a previously disclosed change in revenue recognition policy in Music Publishing. Excluding these two items, our revenue growth was 11%. This revenue growth was broad-based as we continue to effectively monetize a growing number of opportunities throughout the company. This diverse revenue growth profile is what supports our continued confidence in the business. Recorded music revenue grew 10% in the quarter. If you exclude the legal settlement, recorded music was up 6%. Within recorded music, subscription revenue grew 9%. Although still quite healthy, the slower growth relative to the growth seen in the first half of this year was largely timing-related as a result of a lighter release schedule against a strong prior year quarter, which included new releases from Billie Eilish and from Drake, as well also a significant Olivia Rodrigo carryover. Additionally, our shutdown in Russia had just under a point of impact on the year-over-year growth. Subscriber growth at the DSPs remains healthy, and as expected, we have not seen any signs of economic-related slowdowns. Ad-supported streaming, as Lucian referenced, grew 5% in the quarter, in third quarter. The slowdown in streaming growth is consistent with worldwide advertising trends, which continue to impact this part of our business. While it's difficult to predict the continued market impact in the short term, as Lucian alluded to, we feel confident in the growth of our ad-supported business in the medium and long term as we right-size certain deals in the social space and bring new digital partners on board. Physical revenue was down 10% year-over-year. We've said in the past that physical is more release schedule-driven, and that it would be difficult to sustain the levels we have been seeing recently, or reporting recently. Also, physical revenues can be choppy quarter to quarter. In Q3, we had a tough year-over-year comparison with prior year strength in vinyl sales in the U.S. from Billie Eilish and Olivia Rodrigo and strong releases in Japan from King & Prince and BTS. Licensing and other revenue grew 30% in the quarter, driven by the strong recovery in live touring, where we selectively participate in certain markets in Europe, Latin America, and in Asia. Turning to Music Publishing, where revenue grew 7% in the third quarter. I mentioned a moment ago the change in our revenue recognition policy from cash receipts or notification to an accrual basis. This change should smooth our revenues throughout the year. While this change benefited Music Publishing results in the first half of this year, as expected, it reversed in part and became a headwind in the third quarter and will continue to be a headwind in fourth quarter. The third quarter accrual resulted in a negative impact of EUR 21 million in revenue. Excluding this accrual impact, nevertheless, third quarter Music Publishing grew 12%. In Merchandising, we continue to see a very strong rebound in post-COVID touring-related sales. As a result, our revenues more than doubled in the quarter to EUR 189 million. As I mentioned at the start of my remarks, adjusted EBITDA grew 9% in constant currency, driven by the growth in revenue. Adjusted EBITDA margin was 20.8%, down 0.6% points from 21.4% in the third quarter of 2021. There are several items impacting adjusted EBITDA and margin this quarter, which I want to take you through. First is the legal settlement I mentioned earlier, which contributed EUR 52 million to EBITDA. Taken as a music publishing accrual, which had a negative impact of EUR 7 million on EBITDA. The third item is the timing of A&R expenses. You may already know that in our artist costs, we include royalties, which are directly tied to revenue, but also certain recording and non-recoupable costs and what we call A&R expenses. A&R expenses are a combination of advances to new unproven artists, which are immediately expensed, and provisions against proven artists net of recoveries. In the third quarter, these A&R expenses were up nearly EUR 40 million over the prior year, and it's completely tied to timing. It's important to note that these A&R expenses I've just described are actually down on a year-to-date basis, and the uplift that we've seen in third quarter is not expected to carry into the fourth quarter. This timing-related impact contributed about 1.5% of margin decline in the quarter. The last item I'll mention is the revenue mix to merchandising, which has a significantly lower margin than the rest of our business. This mix shift caused 0.5% of margin decline in the quarter. Excluding all of these items, both positive and negative, adjusted EBITDA margin in the quarter is in line with the prior year. We continue to expect revenue mix and operating leverage to drive margin expansion in fourth quarter and bring our adjusted EBITDA margins back to largely flat in the year, for the year. We remain determined and optimistic as we continue to execute on the growth prospects that lie ahead for UMG. We see enormous opportunity for value creation, both for our artists and for UMG, as we work to capture the engagement being driven by our unparalleled and ever-expanding roster of artists and catalog. Thank you. Lucian, Michael, and I will now take your questions. Operator, could you please open the line for Q&A? Of course. If you would like to ask a question today, please press star followed by one on your telephone keypads. If you choose to withdraw a question, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. Our first question today comes from Julien Roch of Barclays. Julien, please go ahead. Your line is open. Yes. Good evening, everybody. Thank you for taking my question. Apologies to Lucian. Those are three for Boyd. The first one is on margin. There has been items that are one-off in nature in most quarters this year, be it revenue recognition or settlement. Can you help us with fourth quarter? Was there any one-off in revenue or EBITDA in fourth quarter 2021? Do you expect any in fourth quarter 2022? That's my first question. My second one is, Boyd, you helpfully told us that EBITDA margin would be largely flat for the year, but on what basis is that? Is it reported EBITDA? Is it adjusted EBITDA, or is it adjusted EBITDA, taking off all the one-offs you mentioned in all quarters so far? The last question on merchandising, would it be possible to have an approximate split of revenues between touring, consumer or retail and direct-to-consumer? Thank you. Thank you, Julien. In terms of fourth quarter, don't actually envisage any one-time items at this point in time to come in fourth quarter. You know, the comment about us remaining largely flat for the year in terms of its adjusted EBITDA. Of course you would want to actually call out the one-time items so that everyone could actually understand what's happening, you know, in the core business. I think that hopefully that kind of addresses, you know, the margin questions. In terms of split of revenues, the revenue split, there was an EUR 80 million increase in touring revenues in the quarter year-over-year. As I've mentioned before, that's a you know very low margin business. Depends on a bit. Let's call it in the 8%-10% kind of area. Nevertheless, it's an incredibly important part of our business and is a means that we can actually connect the fan with the artist with the product. It's of increasing importance in many ways to us as we address the requirements of the super fans. Definitely important, but that's to give you kind of context in terms of the scale of the touring revenue growth in the quarter. Thank you. Our next question goes to Richard Eary of UBS. Richard, please go ahead. Your line is open. Yeah, many thanks. Okay, it's sort of three questions from myself. The first one is just on price increases by DSPs. Obviously, we saw the announcement by Apple Music this week, and within that, they commented about increased licensing costs. I don't know whether you can elaborate what they meant by that, and whether what other discussions you're having around either in engagement-based pricing or blunt price increases or wholesale price increasing with the industry. So that's the first question. The second is just looking at subscription growth. We saw it slow from 13% at first quarter to 12% the second quarter, and now to 8.7% in the third quarter. That's the disconnect relative to, let's say, Spotify's premium growth has widened quarter-over-quarter. I'm just trying to understand what that is. Is that a share issue that we're seeing in terms of the long tail, or is it a share issue in the sort of the front book new release side? Any color on that would be great. Just lastly, just on licensing, obviously, we've seen a step-up in third quarter, you mentioned touring. We haven't seen that in subsequent quarters when actually the merchandising numbers have been particularly strong. I don't know whether there's anything else going on there or whether the third quarter was just a big shift in touring and in first quarter and second quarter, you know, the merchandising sales were driven by something else and not driven by touring, which didn't have the same impact on licensing. Many thanks. Let me take the first question, and thank you for your questions, Richard. This is Michael Nash. With respect to price and license costs, let's step back for a minute and just put this in context. We think that the value proposition of music subscription is extremely compelling, and we have consistently enhanced it by promoting service innovations on the part of our partners, and as Lucian said, by delivering higher quality audio. On a cost per hour basis, music subscription is a fraction of the cost of other premium entertainment categories like video and gaming. I think it's really easy to make the case that music subscription value proposition is under-monetized. We're encouraged by this development. Like all retailers, Apple makes their own independent consumer pricing decisions. With respect to wholesale pricing, we're not going to discuss our wholesale pricing terms with any specific partner. I think that Apple's statement announcing their change sums it up well. To paraphrase, what they essentially said is that they strongly believe in the value of music, and that by making these pricing changes, artists and songwriters are going to earn more for the streaming of their music. On the second question, maybe I'll team up with Lucian here with respect to subscription growth and the comparison to comps like Spotify. Well, at the outset, you know, just with respect to the growth that Spotify announced, we think that's a very positive development. We're encouraged to see that they're delivering growth. We think that it's, you know, a great sign, you know, for the industry. You know, they added 1 million more subscribers than their guidance. That's very positive. We are one of the biggest beneficiaries of the growth of Spotify and their subscription business. We would encourage you to take a broader view than a single quarter snapshot in evaluating, you know, the results that we're delivering in subscription, you know, vis-a'-vis any other comp. We have many different partners that we license around the world. Spotify is a minority of our subscription revenue. As a category leader, it shouldn't be surprising to see them, you know, posting good growth numbers in the category in any given quarter. We wouldn't read too much into the fact that on the ad-supported side, our growth was a couple percentage points higher than Spotify's growth. By the same token, we wouldn't read too much in the opposite. You know, I think that there are some issues that we've already gone into with respect to you know some aspects of release schedule that might be part of the variance on a quarter-by-quarter basis. But again, wouldn't read too much into a quarter-by-quarter comparison. Maybe to pick up on the third question, Richard, which is about licensing and other. It's not strictly speaking merchandise that's in that category. We report merchandise separately. This is licensing and other income within our recorded music division. There are many things going on in there. Lucian referenced, you know, artist management. He referenced, you know, GTS and some of what we do in Asia. Well, clearly, that is also benefiting from an up-tick in touring and live events coming back. We participate in a broader range of revenue streams, and that's what's reflected in there. Really, you know, it's obviously a kind of potpourri of various things. But it is interesting to know, although you actually can't see it in terms of the disclosure, all of the activity in there is growing. I think we do need to look at the level of disclosure that we give in that category in relation to the increasing importance of it. We will consider giving more transparency on that. Thank you. The next question goes to Michael Morris of Guggenheim Partners. Michael, please go ahead. Your line is open. Thank you very much. Two questions for me. One, maybe to follow- up on the question of the subscription pacing. Spotify has disclosed sort of consistently over several years that major labels are losing share of the number of streams on the platform. I guess I'm curious if you could comment on that at all, what your current thoughts are, as to whether you think you or your, you know, the major labels are in fact losing share on subscription streaming platforms more broadly, or if that's Spotify specific or maybe not necessarily accurate. So that's my first. My second is on an increasing amount of news flow on TikTok Music and the potential for an expansion of the service that exists there. Curious if you have any comments on a potential expansion of the service, and if not, if you just share a little bit of your thought on your existing relationship with TikTok and whether an expansion would require some sort of renewed discussion with them or whether your existing relationship provides an opportunity for expansion? Thanks. Hi, it's Lucian here. As I've discussed before, this is on your market share question. Where music platforms are ingesting 100,000 tracks a day, the net result of this is a confusing experience for all of us, consumers, everyone. They're increasingly guided to low-quality content by an algorithm. We don't think that's sustainable for the platforms, nor is it sustainable for music fans. You just have to look at the excitement around the world on a brilliant album by a brilliant artist, with this week's Taylor Swift release. That drives consumption, it drives audience, and it drives new people to there, to everything, to the products, to the platforms, to other music, to other discovery. We've ample data that shows exactly why consumers sign up to these services, and it's largely to hear great music. We supply more of the superstars, classic catalog, and career artists than anybody else, where we continue to invest in the future, and Boyd Muir talked earlier about Spatial and Revolver. I mean, something that was made in 1966 is new to someone tomorrow. That is the beauty of these services, that's the beauty of music in the cloud, and it's the beauty of what we're trying to actually achieve, and the value of this enormous, vast, rich catalog. The brilliant identification of new talent that we're investing in week in and week out. It's that is attracting and retains the subscribers. You know, I don't think bait and switch is a path to growth or long-term value creation. For the most part, most of the platforms recognize this and work with us, as we've seen with Apple on Spatial, to improve the entire consumer experience. I suppose, look, I know it's frustrating in the short term. Nevertheless, it presents real opportunity in the long term. First of all, it makes our role vis-à-vis the artists more critical than ever. We know we're the best partner for an artist with all this stuff moving around. If you wanna break through the noise and achieve a long-term career, we deliver. You know, these platforms stuffed through with stuff which has virtually no monthly listeners, I don't think is a way to grow. Once more, I keep repeating it. When you look at what the retention is and what the churn is, it's our music, it's our artists, it's our products that is making these wheels turn. Let me just pick up on that question of dilution and amplify Lucian's comments with a couple of observations and data points. It's very important to keep the big picture in mind. The full year industry data that we've seen says that the recorded music business as a whole, major label share on a global basis has been relatively stable. What we described before is our broad growth across various different business categories. The stability, I think, speaks to the strength of our portfolio approach with respect to the stability of overall market share of UMG, and, you know, to the majors for that matter, with respect to, you know, broadly looking at the recorded music business. In terms of dilution specifically, to Lucian's point, the platforms right now are flooded by a tidal wave of content as millions of creators gain access. These are essentially content uploaders. They're not artists in the sense that we traditionally think of artists. Nearly 80% of this multimillion creator uploading pool has a monthly audience of less than 50 listeners. In fact, 90% of these creators have fewer than 400 monthly listeners. That's 400 monthly listeners out of an audience of 400 million. Just to put a data point behind that means that 90% of these uploaders are engaging less than one-millionth of the platform. These are hobbyists that are playing to an essentially empty house. Conversely, our consumer research shows that 80% of the customer acquisition and 80% of the customer retention is based on the availability of superstar artist content, classic catalog, and the body of work of career artists. Those are the real artists that we're aligned with whose careers we're focused on promoting. This question of dilution ultimately is a question about the quality of user experience on these platforms. When you're talking about 100,000 tracks being uploaded every day, you're not talking about 100,000 different songs. You're not talking about artists that have populated these platforms with new music. You're talking about noise. What we believe is that the value for the platforms and their business model and the value proposition for our artists is based on focusing on real artists and their content and how we're giving them access to their fans on these platforms. Now, should I transition into the platform? I'd just like to add to that, and you can hear the passion as well as the belief and the determination that we have for our artists and for our products and the product differentiation that we hope we're driving with all of the DSPs and all the platforms. We will fight for our artists and the value that they create more than anything else. That is our purpose. You want to talk about TikTok? Yeah. With respect to our relationship with TikTok, I think there was two parts to your question, Michael. First of all, you asked us to comment on some of the speculation around service expansion. It wouldn't be appropriate for us to discuss confidential negotiations with any one specific partner. Let me simply say that we think integrating subscription with a service that's free to consumers and provides a you know journey of enhanced value for the fans of our artists is a good thing, and we encourage that you know with respect to you know all of our partnerships partners that have you know large you know free consuming bases of you know this massive scale of reach that services like TikTok has. With respect to, you know, our current relationship with TikTok, we have taken the position that we're gonna license early-stage partners and get in business with them, and generate revenue for our artists and, you know, be a seat at the table with respect to the platform roadmaps of these services. We're very focused on ensuring that our artists fairly participate in the value creation that their content is providing for these platforms. I would also note with respect to TikTok, picking up on Lucian's comment about our recent announcement, that we're innovating in new ways with A&R on a platform like TikTok with our StemDrop project with Simon Cowell. We think that that's a great example of how we can drive innovation working with new partners in the space. In terms of where we currently are, you know, situated, with a platform of this scale, we're gonna be working hard to improve the economics for our artists and labels moving forward. You know, we believe that win-win partnerships are certainly possible. We've seen before, where there have been value gaps in the social media space. I was just gonna come in and just embellish some of that. I've seen this movie before. When you look at where the industry was, where we were as a company with YouTube 10, 12, 15 years ago, YouTube recently announced that they were paying out to rights holders $6 billion in over a year-long period. They have stated that they want to be the number one contributor of revenue to the music industry by 2025. When you look at what the funnel that TikTok has, when you look at the billions of views, the rate of which the company has grown. We will fight and determine how our artists get paid and when they get paid in the same way that we have done throughout the industry for many years. I've seen this movie before. I know the ending. Thank you. The next question. Just interested in win-win. Thank you. The next question goes to Lisa Yang of Goldman Sachs. Lisa, please go ahead. Your line is open. Hello. Thanks for taking my question. So the first one is on subscription streaming. Could you maybe tell us about the release schedule? How does that look like so far in fourth quarter? And based on this, do you think we could see a reacceleration in subscriptions streaming back to double-digit growth in fourth quarter? That's the first question. Secondly, you did mention in advertising, you outgrew Spotify and also YouTube in third quarter. I'm just wondering, out of the 5% growth, how much was the contribution from the emerging platforms? So what's the underlying, you know, purest of advertising growth? Could you also comment on the advertising trends you're seeing so far in October? And thirdly, a question on the margins. As you mentioned earlier, UMG is well positioned to navigate any volatility in the macro, given your diversity of revenue stream, but obviously, the different revenues come at different margins. Given what happened in 2022, do you still think your margin can grow in 2023 given the macro is not going to get better? Thank you. Hi, Lisa. It's Boyd. Let me Let me just take the, I think two parts of or two of the questions. We don't give guidance out to so I really don't wanna comment on what our subscription growth would be in fourth quarter. The release schedule, you know, is good. You know, Lucian referenced you know the Taylor Swift release that's already out in the market. Rather not give you specific guidance there and just really reconfirm the guidance that we already gave. It's just over a year ago, you know, that we listed it in that prospectus. You know, we gave the midterm guidance of single-digit revenue growth and also that our margins would expand over the midterm to the mid-20s. That's still the goal and still the ambition. That margin expansion will largely come from, you know, from operational leverage. I have said a few times, it seems like quite a number of times, recently, you know, we are outpacing the revenue guidance that we gave. The areas where we are actually outpacing that revenue growth are in fact coming from lower margin businesses or parts of our, you know, or parts of our business. Like for example, the touring merchandise that I referenced earlier. These are good for EBITDA. These are accretive in terms of EBITDA, but they are actually dilutive in terms of margin. I would just ask everyone to kind of bear that in mind with their expectations on margins. Let me just pick up on the second question, regarding the 5% ad-supported growth and the contribution of emerging platforms. We don't break out the contribution of what some have referred to as non-DSP revenue or, you know, the new digital revenue. Within ad-supported, I think we previously said with respect to prior quarters, that about two-thirds of the ad-supported business is contribution of social and video platforms. I'm not applying that specifically to the current quarter or the growth percentage and the distribution with respect to contributions to growth. I think we previously stated that about two-thirds of the ad-supported breakout is social and video. Thank you. The next question goes to Omar Sheikh of Morgan Stanley. Omar, please go ahead. Your line is open. Yeah. Good evening, everyone. Just a couple left. Maybe just on the last point, Michael, could you just clarify on the new platform deals within ad supported? Was the Meta deal the only new or kind of renewal, if you like, during third quarter? And do you anticipate any new deals to come through in fourth quarter just on new platforms within ad supported? That's the first question. Secondly, maybe for Boyd, do you have any update on advances in catalog spend in fourth quarter? Do you have any sort of visibility on what the cash outflow might be? Some color on that would be helpful. And then finally, maybe just going back to the point on fourth quarter streaming, the fourth quarter comp last year, so fourth quarter 2021. Am I right in saying that basically you had no major releases during that quarter, and so when we are looking at fourth quarter this year, we should be looking at the, you know, what clearly seems to be very strong streaming numbers from the Taylor Swift album as being probably a good reason to expect, you know, an improvement in the rate of growth? Thanks very much. Thank you for your questions, Omar. With respect to clarifying on the new platform revenue contributions, I believe that there hasn't been any other major renewal other than the renewal that we discussed previous quarter on the deal with Meta. With respect to ongoing business development activity moving into the fourth quarter, of course, we can't disclose any confidential conversations that we're having with partners about renewals or new deals. We'll have to leave it at that. Just to pick up on the question about the release schedule. Release schedule last year, from recollection, was strong actually. You know, certainly in terms of physical products because we had a very historic ABBA album that was released. There was, you know, again, a Beatles album released and then Taylor Swift was in the marketplace last quarter. So, you know, we feel good about this quarter. Just to let you know that last year we did have a strong release schedule. In terms of the advances in catalog spend, don't want to give guidance again, you know, for the next quarter. I think what I would actually say is, you know, when we report our full year numbers and we have the opportunity to meet with you again, we fully intend to give you a better disclosure in terms of investments and returns. Just really with it being third quarter, we will wait until the full year to give you some further information, which would hopefully help with the transparency that many are looking for. I'd just like to add also coming back to music. We have this incredible geographic patchwork quilt of local superstars that make up the richness of this company. We've got huge releases in Germany with Helene Fischer. We have a new Bocelli album coming out. We have an act called Seventeen in Japan, Angèle in France, Stormzy coming out in the U.K, more Sam Smith product. It goes on and on and on. We're a complete portfolio. We've got huge releases in Japan. Some of these markets export, and some of them don't. It's not just all about Taylor Swift. Mm. Incidentally, Drake, who's coming out in the next few weeks, very shortly as well. These artists, the music, you look at the volume of Germany, the volume in the U.K, France, Japan, they may not be acts that you've heard of, but they contribute enormously to the entire ecosystem, internally as well as externally. The only thing just to pick up on what Lucian said, Omar, is just to give a little bit of caution on that. You also need to be looking quite carefully, or one should consider quite carefully, whether these acts are physically skewed or digitally or subscription skewed. Some of the ones that I mentioned are very heavily skewed, and some of the ones that Some of the artists that Lucian mentioned there are more digitally skewed, where you actually see the revenue bump over a longer period of time. Just I urge a little bit of caution about getting overly enthusiastic about all of those wonderful names that that Lucian referenced. Thank you. Our last question today comes from Matthew Walker of Credit Suisse. Matthew, please go ahead. Your line is open. Thanks a lot. Can you hear me okay? Yes. Yeah. Yeah, great. Thank you. Yeah, I just had two questions, please. The first is just a clarifying question on the margin. Is the flat margin guide for the full year basically including all of the various one-offs? The second question is on your longer term margin guidance, you know, which is in the mid-20s%. Are you saying that is basically staying? On the other hand, you expect a continuation of some you know some low margin revenue streams being quite strong. Are you you know can you sort of explain the difference between the two? How are we gonna get to the mid-20s margin by 2025 if we have some drags from revenue mix? Sure. I think what I'm doing or trying to articulate here is that the guidance was not only about our margins. Our guidance was also about revenue growth. Just to repeat, the guidance is in the mid-term for us to have high single digit revenue growth annually, and for our margins to move into the mid-20s or increase to the mid-20s. What I'm articulating here, in the event that the revenue growth way outpaces the high single digit revenue growth that we guided, and if that additional incremental revenue growth comes from lower margin businesses, it's an important consideration in terms of reviewing the numbers overall. Again, just to repeat, these are incremental from profits. From a gross EBITDA, these are good businesses for us to be in. There is a consequence which it is dilutive to overall UMG margin. Sorry, Matthew. Your other question was, you know, when you're actually looking at the margins over, I think it's important to exclude the, you know, various one-time items, positive and negative, just so that you can get a sense for the true underlying performance of the business. Thank you. That's all the questions we have time for today. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.