Universal Music Group Acknowledges Slowdown In Streaming Service Growth

Universal Music Group (UMG), the world’s largest music label, has publicly acknowledged a slowdown in subscriber growth for music streaming services, including Apple Music. While UMG views this as a temporary setback, some industry analysts suggest it may indicate a more permanent shift in the market. The music industry faces new challenges as it transitions from a period of rapid expansion.

UMG’s Statement on Streaming Platforms

According to Bloomberg, UMG’s CFO Boyd Muir addressed the issue following disappointing revenue from streaming music services.

“Subscription revenue saw a deceleration in growth. Large partners who have been less successful in driving global adoption have seen a slowdown in new subscriber additions,” Muir stated to analysts. This suggests that platforms owned by Apple and Amazon, in particular, are experiencing slower growth in new subscribers.

Financial Impact and Industry Response

UMG’s shares have dropped by 30%, yet the company maintains that this is a temporary issue expected to be resolved in the coming months. To counteract this trend, music companies are implementing cost-cutting measures, including layoffs and restructuring. While labels believe the slowdown is temporary, the industry is exploring new revenue streams and strategies to sustain growth.

Potential Solutions and Market Trends

New pricing tiers for streaming music are anticipated to help, as labels receive a significant percentage of the subscription price. However, challenges remain. Spotify’s long-promised lossless tier has yet to launch, and Apple is offering similar features for free.

A report by 9to5Mac claims that Apple Music subscriber numbers haven’t been publicly updated since 2019 when they reached 60 million. This lack of updates suggests that five years later, the number may still be below 70 million.

This issue is not exclusive to Apple Music, as Spotify and Amazon Music are also experiencing a flattening of their growth curves. Despite these trends, the music industry has yet to officially acknowledge the broader slowdown.