Slowing Growth in Paid Music Subscriptions in the US
This week, data from the Recording Industry Association of America (RIAA) revealed a significant slowdown in the growth of paid music subscriptions in the United States. In the first half of 2024, the country saw only 2.5 million net additions to paid music subscription accounts, marking a modest 2.7% year-over-year increase. This contrasts sharply with previous years, where subscription growth was significantly higher—6.6 million in H1 2023, 7.9 million in H1 2022, 9.4 million in H1 2021, and a remarkable 14.4 million in H1 2020. The trend indicates a steady deceleration in the growth of music subscriptions, suggesting that the US market may be nearing saturation.
Universal Music Group’s Stock Upgraded Amid Positive Outlook
In other news, Bill Ackman’s Pershing Square Holdings, which holds a 10% stake in Universal Music Group (UMG), expressed confidence in the company’s long-term prospects in its interim financial report for the first half of 2024. Additionally, a prominent music business analyst who has closely monitored UMG for years recently upgraded the company’s stock rating from “neutral” to “outperform.” This marks the second time in a year that the analyst has upgraded UMG’s stock, reflecting growing optimism about the company’s future performance.
Beggars Group Reaches £100 Million in Annual Revenue
This week also saw UK-headquartered Beggars Group report that its annual revenue has surpassed GBP £100 million for the first time. The independent record label group, which owns or co-owns labels like XL Recordings, 4AD, Rough Trade, and Matador, achieved a 13.3% year-over-year increase in turnover for 2023, bringing its total revenue to £103.18 million (USD $128.33 million). Notably, XL Recordings, 50% owned by Beggars, reported an operating profit of GBP £10.32 million (USD $12.8 million) despite releasing just eight new albums during the year.
BMG Reports Double-Digit Revenue Growth in H1 2024
Bertelsmann-owned BMG reported strong financial results for the first half of 2024, with revenues hitting EUR €459 million (USD $496 million), up 11.1% year-over-year, or 12.5% on an organic basis. The company attributed its growth to a significant increase in digital income streams, with the share of digital business rising to 69% of total revenues, up from 63% in the previous year. BMG’s strong performance across its recordings and music publishing business underscores its successful adaptation to the digital age.
The Call for Action Against Unlicensed AI-Generated Music
In a guest column for Music Business Worldwide (MBW), Ed Newton-Rex, CEO of the ethical generative AI non-profit Fairly Trained, argued that it is time for digital service providers (DSPs) to take a stand against AI-generated music that infringes on copyrighted works. He highlighted the need for streaming platforms like Spotify to establish clear policies on AI-generated content, especially when it is created using models trained on copyrighted music without permission. Newton-Rex emphasized that allowing such content to proliferate on streaming platforms dilutes the royalties of human musicians and exploits their work without proper licensing.
Conclusion: Key Developments in the Music Industry
This week has brought several important developments in the music industry, from the slowing growth of paid music subscriptions in the US to significant financial performances by industry players like Universal Music Group, Beggars Group, and BMG. Additionally, the ongoing debate over the use of AI in music creation continues to evolve, with calls for stricter regulations to protect musicians’ rights. As the industry navigates these challenges and opportunities, it remains to be seen how these trends will shape the future of music.
