Universal Music's Streaming Growth vs. Spotify: A Power Struggle?

Universal Music's Streaming Growth vs. Spotify: A Power Struggle?

Universal Music Group (UMG) exceeded expectations in Q2 2024, with revenues up 11% YoY and EBITDA rising by 10%. However, the focus quickly shifted to one underwhelming figure: UMG’s subscription streaming revenue growth of 6.9% YoY. Analysts had hoped for closer to 11%, leading to downgrades and a significant drop in UMG’s share price.

In contrast, Spotify reported a 21% YoY rise in subscription revenues for the same period. This discrepancy raised questions about UMG’s standing in the industry and whether Spotify is pulling ahead in the streaming market.

Despite these short-term concerns, Vivendi, which still owns 10% of UMG, remains optimistic about UMG’s long-term growth potential. The company’s leadership emphasized focusing on future prospects rather than short-term fluctuations.

Amid these discussions, the ongoing dynamic between Spotify and UMG continues to shape the future of the music industry.