Universal Music Streaming Revenue Hits a Wrong Note with Analysts
Streaming helped save the music industry from piracy, but it’s now posing threats to the industry’s biggest names. Universal Music Group, the world’s largest record label, reported half the streaming revenue growth analysts were looking for in the latest quarter — and no amount of Taylor Swift or Post Malone could save them.
- The label’s subscriptions and streaming revenue rose 4%, well below the 10%+ industry analysts had forecasted.
- This disappointing performance led to the company’s worst trading day since its 2021 IPO, with shares dropping over 23% amid concerns about potential analyst downgrades.
Spotify vs. everybody: For years, rights holders like UMG enjoyed double-digit revenue growth thanks to a decade-long rebound in recorded music revenue. To keep it going, streaming services like Spotify have increased prices. However, much of the extra income from these price hikes has gone to Spotify itself, as the company has used its influence to lower payouts to rights holders. Labels are fighting back in court, which could decide the fate of the industry — and their revenues.
