Common Music shares stoop 20% after streaming income progress slows

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Shares in Common Music Group slumped 20 per cent after reporting slower progress in revenues from streaming, triggering fears of an finish to years of rip-roaring outcomes.

The world’s largest music firm, whose roster consists of stars corresponding to Taylor Swift, reported on Wednesday night that its quarterly income from “subscriptions and streaming” rose simply 4 per cent.

The quantity was under forecasts and much from the double-digit progress the trade had loved in recent times as providers like Spotify revived the trade.

Common shares had been buying and selling down 21 per cent on Thursday afternoon in Amsterdam. Shares in rival Warner Music fell 1 per cent on Thursday morning in New York after shedding 8 per cent on Wednesday.

“We’ve been saying for years, that the streaming slowdown is coming,” mentioned Midia analyst Mark Mulligan.

On a name with traders, Common executives partially blamed the slowdown on the streaming providers, claiming that among the main platforms had did not sustain momentum in including subscribers.

The most important music corporations depend on licensing earnings from streamers, who pay labels about 70 per cent of their income in royalties. The biggest paid music streaming providers are Spotify, Apple Music, Amazon Music and YouTube Music.

Streaming and subscriptions makes up about half of Common’s complete income. The unit’s income rose by 4 per cent in the latest quarter to €1.5bn. This compares with annual progress of seven per cent in 2023, 19 per cent in 2022, and 17 per cent in 2021.

Chief monetary officer Boyd Muir mentioned that whereas Spotify and YouTube had “continued to exhibit wholesome progress . . . different giant companions . . . have seen a slowdown in new subscriber additions” — an implicit jab at Apple and Amazon.

“We’ve been in very deep dialogue with our [streaming] companions” about reigniting progress, mentioned chief digital officer Michael Nash.

Neither Apple nor Amazon recurrently report their music subscriber figures. Music makes up a small share of their total companies.

Common’s streaming income was additional hit by a change in technique by Meta, which has in recent times paid tons of of tens of millions of {dollars} to music corporations to license their songs to be used in movies on Fb and Instagram.

Meta “is now not licensing premium music movies from us as of Could”, mentioned Muir.

UMG executives on Wednesday emphasised a long-term view and sought to downplay the significance of 1 quarter.

Chief government Lucian Grainge instructed traders that “quarterly fluctuations in a single income or one other are to be anticipated”. He spoke at size concerning the latest successes of artists together with Swift, Sabrina Carpenter, and Billie Eilish.

Common’s complete income jumped 9 per cent to €2.9bn within the quarter. Adjusted ebitda rose 10 per cent from a 12 months in the past, to €649mn.