Slow growth for Apple Music and other streaming services has for the first time been publicly acknowledged by the world’s biggest music label, Universal Music Group.
While UMG believes it to be a temporary slow-down, some in the industry think it more likely to be a permanent change …
Slow growth for Apple Music and others
We’ve noted on several occasions that Apple Music subscriber numbers haven’t been publicly updated by the company since way back in 2019, when the number hit 60M.
The company had been announcing milestones every 10M subscribers, suggesting that five years later the number may still be below 70M.
This isn’t an Apple-specific issue, with Spotify and Amazon Music also experiencing a flattening of their growth curves, but the music industry has so far been reluctant to acknowledge it.
Universal Music Group admits slowdown
UMG was forced to acknowledge the issue after announcing disappointing revenue from streaming music services. Bloomberg reports the comment by the company’s CFO.
“Subscription revenue saw a deceleration in growth,” Universal Music Chief Financial Officer Boyd Muir told analysts a day earlier. “Large partners who have been less successful in driving global adoption have seen a slowdown in new subscriber additions.”
Translation: Streaming is slowing down. Apple and Amazon in particular aren’t signing up a lot of new customers.
While it’s been something of an open secret, investors were still clearly worried, as UMG shares fell as much as 30% in response.
UMG says it’s a temporary blip, but many aren’t so sure.
The bad news for record labels is that their business is no longer growing as quickly. Streaming has exited a high-growth era and settled into a slower-growth era. Music companies are limited in their power to address the streaming slowdown on their own. So while labels believe this is just a temporary setback, they have cut staff and reorganized to juice their numbers in the short-term.
Some believe new pricing tiers for streaming music will help, as labels are paid a (high) percentage of the subscription price – but Spotify’s long-promised lossless tier still hasn’t launched, and Apple gave it away for free.
Photo by Thomas Kolnowski on Unsplash
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