5 Things to Watch for in Music Companies’ Upcoming Q2 Earnings Results

Top executives of publicly traded music companies tend not to do many interviews. They sometimes appear at a bank conference to speak to the financial crowd or at an event to deliver the company’s message on hot-button topics such as artificial intelligence. And four times a year, CEOs and CFOs can be found on their companies’ earnings calls, delivering carefully worded introductory remarks and answering analysts’ questions about the quarter’s results and important matters on the horizon. Revelations are few in this kind of forum, but the discussions always provide nuance to better understand how executives are thinking.

Spotify kicks off music companies’ earnings season on July 29, followed by Universal Music Group on July 31. Warner Music Group is scheduled to release earnings on Aug. 7. Here are five things to look for in those and other earnings results.

Slowing audio streaming growth in the U.S.

If there’s one thing investors in the music space care about, it’s streaming growth. The problem for labels and publishers is that the growth of on-demand audio streams in the U.S. slowed to the low single digits in the first half of 2025, according to Luminate’s mid-year report released Wednesday (July 16). After finishing the first half of 2024 with an 8.0% gain, on-demand audio streaming growth was just 4.6% in the first half of this year.

What investors should realize — and what music companies need to effectively communicate — is that streaming activity isn’t the same as streaming revenue. The number of new subscribers has also slowed, but revenue fares better. While the number of music subscriptions in the U.S. slowed to 3.3% in 2024, the average revenue from each subscription rose 5.3%, according to the RIAA. That’s because price hikes in 2024 followed numerous increases in 2022 and 2023 — and while the U.S. hasn’t seen any subscription price increases in 2025, record labels have stated they expect a regular cadence of price hikes in the coming years. Additionally, streaming platforms are expected to generate more revenue by offering higher-priced tiers to superfans (see below).

The economy and fan spending

When consumers start to feel a pinch in their pocketbooks, they clip coupons and drive out of their way to save a few cents on gas, but don’t shy away from higher prices for concert tickets and refuse to cancel their music subscriptions. In the years following the pandemic, music has proven to be relatively immune to economic jitters. People can postpone some purchases, but they need to be entertained.

Still, music companies consistently get questions about fans’ spending habits. Concert promoters in particular are closely watched for signs that fans are too financially fatigued to spend on tickets, food & beverage, merchandise and parking. Those questions are likely to extend to upcoming earnings calls: U.S. inflation rose to 2.7% in June, the U.S. Federal Reserve says companies are passing tariffs along to consumers and credit card delinquencies are rising.

Progress in reaching superfans

A few decades ago, consumers’ spending on music increased linearly with their interest level. The most avid music lovers would buy more albums than casual fans. For hardcore fans, the limit was the balance in the checking account. Today, some music lovers will purchase LPs and CDs of their favorite artists, but the price of a music subscription service creates a spending cap for many people. Spending more than a monthly fee is often lost. So, it makes sense that record labels are increasingly interested in monetizing that untapped spending potential. 

With streaming growth slowing, companies are under pressure to deliver continued revenue increases. Music executives have been talking about superfan tiers of music subscription services for a couple of years, although nothing has materialized. Spotify’s long-rumored superfan tier is in the works — CEO Daniel Ek called the product “really exciting” back in February — but hasn’t yet materialized. Warner Music Group’s superfan app, announced by CEO Robert Kyncl in February, made a surprise appearance in a Wall Street Journal profile of new Atlantic Music Group CEO Elliot Grainge in April. The app, described by the Journal as “bare bones in both tech and content,” is said to have “suffered from a lack of alignment between the team building it and Atlantic.” But, again, nothing has been launched.

Attention to superfans isn’t exclusive to recorded music. Concerts and festivals have long segmented customers by their willingness to upgrade to more exclusive and luxurious experiences. Concert promoter Live Nation has been busy growing its superfan revenue by building out VIP experiences at many of its amphitheaters. With outdoor music season underway, investors and analysts should be eager for an update on those projects’ return on investment.

The state of ad-supported music

In late 2023, SiriusXM began targeting a younger, more price-conscious consumer with the launch of a new streaming app with an affordable, $9.99-per-month price tag. Less than a year later, the company moved on. Rather than put more resources into a streaming app that failed to catch up with consumers, SiriusXM re-focused on the in-car experience, where satellite radio commands a higher average revenue per user (ARPU) than streaming services. That strategy shift resulted in this week’s announcement of SiriusXM Play, an ad-supported satellite radio service that will cost less than $7 per month.

SiriusXM investors, who have seen the stock drop 57% since the beginning of 2024, should have some questions about SiriusXM’s attempt to thread a proverbial needle by adding a lower-cost product without cannibalizing existing subscribers. Introducing a subscription tier with ads would have seemed riskier before the tactic became commonplace in video-on-demand streaming. (SiriusXM-owned Pandora offered ad-free and ad-supported radio for years.) Now, separating consumers into groups by their willingness to sit through ads is basic marketing. SiriusXM does generate ad revenue despite offering ad-free music channels. With $167 million in advertising revenue in 2024 and an average of 33.6 million subscribers, the company generated $4.98 of advertising revenue per subscriber last year.

Elsewhere in music, there are signs that advertising lags subscriptions. Earnings results from Spotify and record labels have revealed that subscription gains have outpaced ad-supported streaming growth. Advertising sluggishness has also been a problem for radio companies such as iHeartMedia and Cumulus Media, where the biggest growth has come not from music products but podcasts. Upcoming earnings calls will reveal if investors can expect more from advertising revenues or if subscription revenues will continue to drive growth.

Mergers, acquisitions and investments

Music companies often reveal three things to investors during their earnings calls: their recent market shares (unless they were disappointing), how their upcoming release schedules will bolster their market shares, and their plans to obtain more market shares through M&A, partnerships and investments. While winning market share through traditional A&R is a never-ending quest for record labels, buying market share has become an increasingly common — and competitive — game.

Growth means more than buying a record label or catalog. These days, companies take an ownership stake in catalog acquisition funds (see Universal Music Group’s investment in Chord Music Partners and Warner Music Group’s $1.2 billion venture with Bain Capital). Label services are increasingly critical, which explains UMG’s acquisition of Downtown Music Holdings (which is now being reviewed by the European Commission). Distribution continues to be a hot commodity: Concord bought Stem in March, and WMG briefly pursued Believe in 2024.

While earnings calls aren’t a venue for announcing deals, they provide companies with opportunities to talk about how they expect to spend their money. Given the continued slowdown in U.S. streaming (see above), companies are likely to boast of their investments in emerging markets. Catalog acquisitions are an evergreen topic, and companies can talk about their appetite for deals and the need to find financial partners to help shoulder the capital requirements.