Despite maintaining growth in other segments, Universal Music Group has suffered a significant blow to its streaming revenue, with figures dropping between 3.9% and 5.1% year-over-year across several quarters of 2024 and 2025. The streaming decline, which saw a substantial miss of €343 million versus €387 million expected in Q2 2024, has primarily been attributed to slowing growth at advertising-based platforms like Spotify and YouTube, where audience preferences are shifting toward short-form video content with weaker monetization models.
Universal’s streaming revenue crisis deepens as audience preferences shift to short-form video with weaker monetization models.
The market reaction was swift and severe, with Universal’s share price plummeting up to 30% following its Q2 2024 earnings report—the steepest decline since the company’s IPO in 2021. This dramatic drop erased over $16 billion in market capitalization, reducing the company’s value from approximately $56.5 billion to $39.9 billion and highlighting investors’ deep concerns about the sustainability of digital growth strategies.
While streaming stumbled, other segments showed resilience. Recorded music subscription revenue grew moderately at 5.3% to 8.9% year-over-year, though still below analyst forecasts of around 11%. Music publishing emerged as a bright spot, with revenue increasing by 11.5% to 12.1%, while downloads and other digital non-streaming revenue saw gains between 8% and 17%, partially offsetting streaming losses. Independent artists have increasingly turned to playlist pitching strategies across multiple platforms to maximize visibility and revenue in the changing streaming landscape. The company’s merchandising revenue increased by 44% largely thanks to Taylor Swift’s Eras Tour contributions.
Behind the scenes, Universal’s cost structure reveals significant investment in talent, with artist costs rising to €2.795 billion in the first half of 2025—representing 47.5% of revenue. This increase underscores the company’s strategy of doubling down on premium content creators despite current streaming challenges. Artists seeking to weather similar industry fluctuations are increasingly pursuing sync deals as alternative revenue streams that provide substantial income through music licensing for films and commercials. The company reported a 6.5% growth in total annual revenue reaching €11.83 billion, showing overall stability despite streaming challenges.
Industry analysts note that the post-pandemic normalization of streaming consumption patterns was inevitable, but the severity of Universal’s streaming decline has raised questions about the company’s digital evolution strategy.
As Universal navigates these headwinds, its ability to leverage strength in publishing and subscription services while addressing streaming weakness will determine whether this setback represents a temporary stumble or a more concerning long-term trend.
