Taylor Swift’s label triggers fears streaming has peaked
Taylor Swift’s label triggers fears streaming has peaked
James WarringtonFri, July 31, 2026 at 1:00 PM UTC
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Taylor Swift signed with Universal Music in 2018 - Instagram
A slowdown in growth at Taylor Swift’s record label has triggered fears that the streaming boom is coming to an end.
Universal Music Group, the world’s largest music company, reported revenues of €3.3bn (£2.8bn) for the second quarter of the year, up 10.5pc on last year. This was driven by 14pc growth in revenues from streaming.
However, the figures fell short of expectations and marked the second consecutive period of slowing growth, while profits were down 2pc to €1.3bn. Shares in Universal slumped by as much as a quarter to a record low following the update.
Universal, whose artists also include Noah Kahan, Drake and Olivia Dean, has blamed the slowdown on a “lighter” schedule of releases in recent months.
However, concerns are mounting that the streaming boom is beginning to fade after years of rapid growth.
Analysts at Bernstein, a financial advisory firm, described the figures as “underwhelming at all levels”, while Daniel Kerven, a researcher at JP Morgan, said: “There is no sugar-coating it. That was not a good quarter.”
Shares in US-listed rival Warner Music fell 5.6pc on Thursday as jitters spread across the market.
Spotify, which launched in 2008, has been widely credited with saving the music industry after piracy pushed it to the brink of collapse at the start of the digital era.
But after years of double-digit expansion, Spotify’s growth is beginning to cool as the market reaches saturation. The Swedish giant has been pushing through price rises to drive revenue growth instead.
In turn, this has taken its toll as cash-strapped consumers reconsider their subscriptions or opt for cheaper advertising-funded tiers amid cost-of-living concerns.
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Netflix also suffered a sharp fall in its share price earlier this month after its forecasts for revenue growth disappointed shareholders.
In a call with investors, Universal bosses acknowledged that ad-supported streaming revenues were under pressure. But Matt Ellis, the company’s chief financial officer, said: “We continue to see very strong industry subscriber growth on a global basis, even as we see price increases.”
Failed takeover attempt
The slowdown comes as Universal, which is led by Sir Lucian Grainge, reels from a failed £50bn takeover by Bill Ackman, the hedge-fund tycoon.
Mr Ackman’s Pershing Square launched in April an attempt to take control of the record-label giant in a deal that would have shifted its stock market listing from Amsterdam to New York.
He argued that the company, which was spun off from French media conglomerate Vivendi in 2021, was undervalued compared with its rivals and should tap into deeper pools of capital on the US market.
However, Universal’s board rejected the offer and Mr Ackman has since sold his €1.4bn stake, ending a five-year investment in the company.
Sir Lucian insisted that the company’s strategy was paying off and pointed to its recent $775m (£577m) acquisition of record label Downtown as a source of future growth.
He added: “Our confidence starts with the fact that music is the world’s most enduring and accessible form of entertainment, and every wave of innovation has expanded its reach as well as its appeal, and this one will, too.”
Streaming growth has started to plateau in the UK, according to new figures released by Ofcom this week. The data showed 72pc of households had a video-streaming subscription at the start of the year, up just two percentage points since 2022.
Average listening time for Spotify users stands at about 45-50 minutes per day, according to figures from tech research firm Dataconomy. However, this is down from a pandemic peak of more than 140 minutes in 2020 and 2021.
Source: “AOL Money”
