Streaming Growth Is Slowing at the World’s Biggest Music Company. Could TikTok Help?

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Streaming growth is slowing at the world's biggest music company. Could TikTok help? Read Tim Ingham's latest

In simple percentage terms, year-on-year streaming revenue growth at Universal was up, organically, by 23.4% in the nine months to end of September 2019. In the prior year period, that figure stood at 35.8%; in the year before that, it was 40.8%.

These calculations show that, in the first nine months of this year, UMG’s growth in recorded music streaming revenues was over $100 million smaller than that same YoY growth in the equivalent period of 2018 : +$611 million vs. +$497 million . Plus, Universal is still the inarguable number-one most dominant force in mainstream music: Vivendi proudly trumpeted on its call with investors earlier this month that UMG-signed artists claimed eight of the top 10 tracks on Spotify’s Global chart in the first half of 2019 — including the entire top six.

In an investor update issued on October 17th, Morgan Stanley remained upbeat on UMG’s prospects for growth. It noted that, in a bull-market scenario, Universal could currently command a whopping $45 billion valuation. However, Morgan Stanley has also noticed the slowing revenue growth UMG’s labels are seeing from streaming in 2019: It noted that YoY growth from streaming at Universal weighed in at 28% in Q1 this year, down to 23% in Q2 and just 20% in Q3.

 

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