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The release of CTS Eventim’s third-quarter results on Thursday (Nov. 20) marked the last earnings report from a major music company until early 2026 (a few smaller companies tend to announce much later), meaning it’s time for Billboard’s awards-style recap running down the best and worst of the bunch.
Music companies generally had a good quarter. Live Nation set yet another record for third-quarter revenue. Spotify delivered the double-digit revenue growth people have come to expect. K-pop companies delivered strong revenue growth, although earnings usually didn’t keep pace.
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In a rare occurrence, a handful of music streaming companies actually posted revenue declines. China’s Netease Cloud Music was down 2%, Deezer was off by 1% and LiveOne, hobbled by changes at Tesla, fell 42%.
Aside from the financial numbers, AI gave companies a great deal to talk about. Universal Music Group and Warner Music Group took the force-multiplier approach by announcing major AI licensing deals a day before they released earnings. Each company went into their conference calls with analysts in the immediate wake of a positive development on a hot-button topic: Recently signed agreements with AI music generator Udio, which will turn into a rights holder-friendly walled garden when it re-launches in early 2026.
For more details, check out Billboard‘s recap of all music companies’ earnings results released through Nov. 21.
Without further ado, here are the highlights from the latest round of earnings results.
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Greatest Progress on a Business Model: Sphere Entertainment Co.
It’s not difficult to find a critic of Sphere, the massive, spherical venue in Las Vegas with huge production costs and a mountain of debt, as sustained profits are a long-term project and aren’t likely to appear until Sphere franchises open in Abu Dhabi and other markets. Still, Sphere Entertainment Co. — which also includes MSG Networks — made progress in the third quarter. Sphere landed a hit with its AI-assisted update of The Wizard of Oz, which has sold over 1 million tickets to date at an average price analysts put at well over $100. Showings of Oz and other movies rose to 220 from 207 in the prior-year quarter, and a winning residency from Backstreet Boys helped the Sphere division turn a negative adjusted operating income (AOI) into $36 million of positive AOI.
Best Revenue Growth Rate, All Companies: YG Entertainment
Third quarter revenue jumped 107% to $128 million for the company behind such K-pop groups as BLACKPINK and BABYMONSTER, beating out fellow K-pop company JYP Entertainment, which topped the list last quarter with a 126% year-over-year growth rate. Because K-pop companies focus their resources on relatively small rosters, their financial results tend to have greater volatility than Western companies with far more artists under their roofs. Revenue rises and falls based on the success of a handful of new albums and tours.
Best Revenue Growth Rate, Digital Service Providers: Tencent Music Entertainment
Online music revenue jumped 27.2% to $979 million as the number of paying users rose 5.6% to 125.7 million. Tencent Music didn’t break out the number of subscribers to its high-priced Super VIP tier — it’s been at 15 million for a few quarters — but the quarter’s 10.2% increase in average revenue per user suggests that Super VIP made a positive impact.
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Best Stock Price Bump: SiriusXM
SiriusXM shares jumped 10% the day the company released earnings — not because of the results, but because the company raised its full-year guidance for revenue, adjusted EBITDA and free cash flow by $25 million. The satellite radio company, which also owns streaming brand Pandora, is trying to manage declining subscribers and a soft advertising market by cutting costs. The plan mostly worked in the third quarter as SiriusXM’s adjusted EBITDA fell just 2.5% to $676 million, and revenue fell 1%. Net cash from operating activities jumped to $430 million from $309 million in the prior-year period.
Worst Stock Price Drop: StubHub
The secondary ticketing company went public on Sept. 17 and released its first earnings report on Nov. 13. Revenue was up 11% year over year — it would have risen 24% if not for Taylor Swift ticket sales in 2024 — but the company didn’t issue guidance for the fourth quarter. Investors reacted as if StubHub was hiding bad news, and the share price dropped as much as 31% the following morning and finished the day down 21%. Right on cue, news broke on Monday (Nov. 17) that the U.K. government plans to ban the resale of tickets at a profit, causing StubHub’s stock to drop an additional 30.7% over the next four days.
Best Attempt at Earnings Call Levity: Spotify
Spotify co-founder and CEO Daniel Ek is stepping down as CEO and will be replaced by co-CEOs Gustav Söderström and Alex Norström, who are currently co-presidents. As Ek explained when the company released third-quarter results, the Nov. 4 earnings call would mark his final such appearance before he transitioned to the position of executive chairman. At the end of his introductory remarks, Ek then turned the call over to Norström. “Thanks, Daniel,” Norström said. “No pressure.”
Worst Quarter: Vivid Seats
The secondary ticketing company’s revenue plummeted 27% to $137 million and adjusted EBITDA fell to $4.9 million from $34.1 million in the prior-year quarter. The news sent the Chicago-based company’s share price down 11.3% in a single day. But Vivid Seats is taking steps to improve: It replaced CEO Stan Chia with Lawrence Fey, who was previously CFO; doubled its annualized cost-savings target to $60 million; and “simplified” its corporate structure “to maximize our operating efficiency,” the company stated in a press release. On a positive note, the news about the U.K. government’s intention to limit ticket resales to face value doesn’t hurt Vivid Seats, which has international aspirations but gets virtually all its revenue from North America.
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Just because an AI-generated track makes— or even tops — a Billboard chart doesn’t mean it’s very popular.
Take, for example, Breaking Rust, an AI-assisted artist that attracted global attention for reaching No. 1 on the Country Digital Song Sales chart. Breaking Rust’s track “Walk My Walk” amassed approximately 3,000 track downloads in the week ending Nov. 6, according to Luminate. “Don’t Tread on Me” by Cain Walker, another AI-assisted country artist, is currently at No. 3 after selling approximately 2,000 downloads in that same week. That’s all it takes to top a genre download chart these days.
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The digital download is a relic of an era when iTunes ruled the music industry and streaming was in its infancy. Over the years, as consumers shifted to subscription streaming platforms, downloads have all but disappeared from the landscape. In 2024, downloads accounted for $329 million, according to the RIAA, approximately 2% of U.S. recorded music revenue. That’s down 86% from 2015, when downloads generated $2.3 billion and represented 34% of the U.S. market. Revenue from subscription streaming platforms, which now play a major role in the most well-known charts, climbed 860% to $11.7 billion over the same time span.
Pop songs put up much better numbers. As Billboard noted in an article on country executives’ reactions to Breaking Rust and Walker, the top track on the all-genre Digital Song Sales chart, Taylor Swift’s “The Fate of Ophelia,” sold 29,000 copies. But even the most popular pop download doesn’t do the numbers seen just a decade ago. The No. 1 track in the same first week in November 2015, “Hello” by Adele, sold a whopping 636,000 units.
To put Breaking Rust and Walker’s popularity into a better context, it helps to know where they rank amongst their human peers. For the week ended Nov. 6, Breaking Rust was ranked No. 228 among country artists in terms of equivalent album units (EAUs, which combine streams and sales into a single metric). No. 1 country artist Morgan Wallen had 113 times more EAUs and 227 times more EAUs than Walker, who was No. 359. It would take 13 Breaking Rusts and 25 Walkers to equal the No. 18 artist, Bailey Zimmerman.
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The most successful AI artist is currently Xania Monet. Her creator, Telisha Jones, writes the lyrics and uses an AI platform to create the music. Monet has been on Billboard charts such as R&B Digital Song Sales, Hot Gospel Songs and Emerging Artists. But among artists of all genres, Monet ranked only No. 927 in terms of EAUs in the week ended Nov. 6, about equal to Cyndi Lauper and French Montana — artists who, unlike Monet, aren’t currently being promoted to terrestrial radio and attracting worldwide fascination.
To be sure, many human artists would love to have the sales and streaming numbers of these AI-assisted artists. Walker and Breaking Rust are No. 9 and No. 11, respectively, on the Emerging Artists chart, right behind country singer Alexandra Kay, who is signed to BMG-owned BBR Music Group and regularly sells out theaters around the country. In the U.S., Breaking Rust has 9.3 million streams to date, while Walker has 1 million, according to Luminate — the kind of numbers achieved by developing artists backed by record labels and artist managers.
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But the AI artists attracting headlines and creating consternation within the music industry don’t have popularity to match the attention they’re getting. They are making noise mainly by getting onto download charts, which don’t reflect how most Americans consume music. Nor are they likely to have the longevity of other artists. Walker, ranked No. 359 amongst country artists, is just a few spots below country legend Hank Williams. But nobody is saying that Walker matches the popularity of Williams, an inductee into the Country Hall of Fame, Songwriters Hall of Fame and Rock and Roll Hall of Fame.
That’s not to say AI artists aren’t having an impact. They’re quickly growing in numbers, and it’s not difficult to imagine that they could soon gobble up much more market share.
Take the 10 AI-generated or AI-assisted artists mentioned in Billboard’s Nov. 4 article about AI artists who landed on the charts. The 10 artists mentioned in that article — including Juno Skye, Enlly Blue, Unbound Music, Ruby Darkrose and ChildPets Galore — have an average EAU in 2025 of approximately 7,200 units. That’s not much. But 1,000 of these AI artists, in aggregate, could have a legitimate impact: 1,000 artists at 7,200 units is 7.2 million units — equal to a 0.7% year-to-date U.S. market share. That’s on par with large independent record labels like Big Machine Label Group (0.78%), BMG (0.77%) and Secretly Distribution (0.75%). Two thousand AI artists with an average of 3,600 AEUs would have the same collective market share. Or 4,000 AI artists with an average of 1,800 AEUs.
An invasion of AI music may feel like a dystopian future to most people, but it’s a plausible scenario. A person reading about Xania Monet or Breaking Rust could experience the same spark of inspiration felt by teenagers seeing punk rock bands in the mid to late ‘70s. Punk grew quickly because starting a band required a passion for music, not musical expertise. When millions of people read about AI artists on the charts, some of them will have the same realization that kids had in the ‘70s: “If they can do it, why can’t I?”
Billboard determines if a charting title is AI or AI-assisted through checking the artists’ official pages, some of which say they are generated with the help of AI; cross-checking the songs using Deezer’s AI detection tool, which adds a flag to all AI-generated content on the platform; and reaching out to the creators themselves, among other methods.
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AI was an omnipresent topic at the Music Tectonics conference in Santa Monica, Calif., earlier this week, creeping into seemingly every panel discussion and casual poolside conversation. Everybody can see that AI will transform the music business. That’s a 30,000-foot view. Zoom in, however, and there’s far less certainty about how, exactly, AI will disrupt the status quo.
“Not everybody wants to be a creator” was a frequently heard sentiment. Lucas Cantor Santiago of Mindset Ventures has a particular point of view as a composer. The setup he currently uses to write music would have cost $200,000 15 years ago. Now, somebody can get “basically the same tools” from a trip to the Apple Store. But Cantor Santiago doesn’t believe access to tools has led to more creators. “It’s just caused people like me to start writing music faster, and maybe people who didn’t have classical training to be able to start writing music,” he said on a panel.
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AI’s ability to help human creators, not replace them, was a common theme at Music Tectonics. Granted, the conference was heavy on consumer technology brands such as Yamaha, Roland and Fender. Had AI anarchists been invited to speak, there would have been more diversity of thought. But the opinions of people who actually make music for a living carry a lot of weight, as they’re on the front lines of making music that eventually finds an audience. To this crowd, AI slop has little redeeming value and won’t find a meaningful audience.
The historical record doesn’t fully support the idea that AI won’t increase the ranks of creators, though. Greater access to inexpensive production and distribution tools has already transformed the music business. Artists who were previously locked out of nationwide distribution — it was impossible for a DIY artist to get Tower Records to stock their CDs — now have access to tens of millions of consumers through digital distributors and digital service providers (DSPs) such as iTunes and Spotify. “When I owned a record label and house label in Chicago in the ‘80s, there were 100 new records a week,” said Matt Adell, co-founder and COO of Musical AI, on a panel. “When I left [EDM download store] Beatport, there were 27,000 new records a day. There are now over 150,000 new songs a day hitting the DSPs.”
Given easier tools, people are already creating more music. Many of the 150,000 songs a day cited by Adell — or whatever the number is currently — were created by AI. French music streamer Deezer said in September that 28% of tracks uploaded are created wholly by generative AI, underscoring the fact that AI tools could lead to more music being created. Unpopular, long tail music may not attract much attention, but it creates markets where none previously existed. DIY distributors such as DistroKid, CD Baby and TuneCore can operate because production tools are inexpensive — sometimes free — and artists can afford the modest fees to distribute their songs globally.
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AI’s biggest impact could be to turn everybody into a small-scale creator. Kristen Bender, senior vp of digital innovation strategy and business development at Universal Music Group (UMG), noted during a panel that 30% to 40% of all music content on social media platforms has been manipulated by AI in some way, suggesting there are more creators than people might think. “We think that AI is going to enable so [much] hyper-personalization and interesting ways to interact with content,” she said.
Along those lines, Liz Moody, a partner at law firm Granderson Des Rochers, described how AI tools will allow fans to interact with artists in new ways. Moody, who worked on Udio’s recent licensing deal with UMG, told the audience Udio could create “a fan-focused experience where fans can work with their favorite artists to make personalized music, maybe with the artist’s voice, or maybe create some mashups between two songs that they love.”
When AI tools first appeared, the initial conversation focused on AI-generated music’s potential to supplant the popularity of human-created songs. But Bender and Moody — who have visibility into where these business models are headed — encouraged people to think smaller. It’s easy to imagine a licensed, industry-sanctioned generative AI platform partnering with well-known artists to create personalized renditions of “Happy Birthday” for their subscribers. But it’s a lot harder to imagine anyone other than the creator wanting to hear their personalized version.
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A few years into the debate about AI’s potential economic impact on music, the jury is still out.
AI could be great for the music business, enabling new products and creating new revenue streams for artists and songwriters. Universal Music Group (UMG) has said as much. “We believe the commercial opportunity is potentially very significant,” chief digital officer Michael Nash said during the company’s earnings call on Thursday (Oct. 30), a day after it announced a licensing deal with AI music generator Udio. “These new products and services could constitute an important source of incremental additional new future revenue for artists and songwriters.”
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Then again, AI could erode record labels and music publishers’ businesses by flooding the internet with inexpensively made music that takes some — not all — of their market share. Record labels have already lost market share to independent artists in recent years, and AI could be either a continuation or acceleration of existing trends.
Two years ago, analysts at Barclays Research were dismissive of AI-generated music’s threat to the established music business. The general population might have access to music-making tools, but, Barclays reasoned, the quality of the music was poor, and songs created by faceless software housed on computer servers couldn’t create the human connection that listeners desire. Record labels and music publishers could be hurt if social platforms pushed AI music, but the money-saving tactic could run into legal roadblocks, they said. For all the initial hoopla about AI’s ability to upset the status quo, too many questions at the time remained unanswered.
Today, though, Barclays is singing a different tune, and advancements in AI platforms have answered some of their earlier questions. Now, the analysts are more convinced of AI music’s potential to erode record labels’ market share and weaken their financial standing. The quality of music has “improved significantly,” they wrote in a Tuesday (Oct. 28) report titled “AI in Music: Danger Zone,” adding that it’s “hard to differentiate between human music and AI music.” Fans still crave connections with human artists, they wrote, but as opposed to their earlier take, they conceded that AI music represents a threat to the music establishment.
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In the Barclays analysts’ view, AI is a mixed bag of gains (such as AI-enabled superfan tiers) and losses (lower royalties from social media platforms’ adoption of cheap AI music). Overall, though, they believe the damage that AI can create will outweigh its benefits. Their bottom line: In an average scenario, UMG takes a 1% hit to earnings before interest, taxes, depreciation and amortization (EBITDA) and Warner Music Group’s EBITDA drops 4%. A worst-case scenario calls for deeper losses. A best-case scenario sees AI providing a boost.
Not everybody is in the Barclays camp, however. Despite advancements in the quality of music produced by AI platforms, analysts at J.P. Morgan are sticking with their opinion from 2023 that AI will not have “a meaningful impact on industry revenues.” Analysts wrote in a note to UMG investors on Monday (Oct. 27) that AI risks have been “negated” and “controlled” by the company’s efforts in recent years to get streaming platforms to prioritize and reward professional artists over mass-produced, low-quality recordings.
Like Barclays, J.P. Morgan believes market erosion is a genuine threat to UMG’s market share. But J.P. Morgan analysts see much more upside in AI. (Notably, J.P. Morgan’s analysis was less thorough; unlike Barclays, it didn’t put a dollar value on AI’s potential impact.) They note that UMG will benefit from AI artists’ need for publishers and record labels (which jibes with Billboard’s assessment of Hallwood Media’s impact on Xania Monet’s on-demand streams). AI can also generate revenue streams from new licensing opportunities and make listening to music more enjoyable, they write.
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The major labels and publishers haven’t signed or created AI artists yet, but if they do, J.P. Morgan believes they will benefit from economics that are superior to their deals with human artists and songwriters. It’s not a stretch: To capture some of the market share that has shifted to independent artists, UMG has invested heavily in artist services by building up Virgin Music Group and attempting to acquire Downtown Music Holdings (the European Commission will announce its decision on the proposed merger in February 2026). If AI artists are to compete in the marketplace, they will need the same services that are available to human artists, such as promotion, distribution, copyright administration and public relations.
One thing is certain: Because AI music is in its infancy, trying to figure out its long-term trajectory is difficult. When the music industry began navigating the shift from physical to digital in the late ‘90s, few people could have guessed that the marketplace of 2025 would be dominated by subscription royalties and that download revenue would be almost nonexistent. When Napster launched in 1999, nearly a decade before the iPhone debuted, imagining the influence of an app like TikTok would have been nearly impossible. Music companies got to this point by enforcing the value of their intellectual property through a few decades of licensing agreements and lawsuits.
In the near term, expect more deals like UMG’s partnership with Udio. Over the long term, expect to be surprised.
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The Velvet Sundown is an AI-generated rock four-piece that captured worldwide attention in June after word of the surreptitiously computer-made music spread online. The music is a mix of classic rock, folk and psychedelic Americana. The album’s surrealist artwork evokes Salvador Dali during a stint in the high desert of the American Southwest. The band came replete with an AI-generated press photo and a halfway believable bio.
News of The Velvet Sundown’s AI origins spread like wildfire, and U.S. on-demand streams quickly jumped to approximately 140,000 per week, according to Luminate. The dramatic rise revealed strong curiosity about a band with a fully formed concept but no human creativity. Interest reached a fever pitch the following week when weekly on-demand streams jumped to 760,000. That turned out to be the band’s high-water mark.
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Streaming activity dropped 25% the following week, and another 7% the week after. Then interest in The Velvet Sundown fell off a cliff. Weekly streams plunged 48%, then 34%, and then another 25%. Six weeks after hitting its streaming pinnacle, The Velvet Sundown’s weekly on-demand streams were just 15% of its peak number. In another nine weeks, those streams were just 7% of the peak week.
The band’s Google search traffic followed a remarkably similar trajectory. The number of searches for “The Velvet Sundown” peaked the same week that on-demand streams did, and then steadily dropped.
When plotted on a chart, The Velvet Sundown’s weekly U.S. on-demand streams and U.S. Google search traffic look like one-half of a seismometer after a massive earthquake. A sharp peak of curiosity — measured in streams and searches — was followed by a cliff of disinterest.
The shape of the curve says a great deal about both The Velvet Sundown and AI music in general. If AI music is fortunate enough to find an audience, it won’t be easy to keep listeners engaged. Maintaining and building an audience is the domain of record labels, artist managers and armies of service providers and consultants. People see chart positions, news appearances and social media mentions, but they don’t see the behind-the-scenes blocking and tackling that creates all that visibility. The Velvet Sundown had the benefit of being one of the first AI artists most people encountered. Once that novelty wore off, it was left to compete with far more organized, more resourceful artists.
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Enter Xania Monet, an AI-based R&B artist who signed a multi-million-dollar deal with Hallwood Media in September. Monet is the creation of Mississippi artist Telisha Jones, who used AI music platform Suno to create songs based on lyrics she penned herself. Monet could have had an experience similar to The Velvet Sundown’s, but she took a different path.
When Billboard broke the news about Monet’s signing, a wave of media attention drove her on-demand streams and Google search traffic to a peak in mid-September. The week after the peak, Monet’s streams fell 24% — remarkably close to The Velvet Sundown’s 25% decline after its peak week. That could have been the beginning of a steep drop following the height of the public’s curiosity. Instead, Monet’s weekly streams stopped their downward decline and leveled off over the last three weeks. So why didn’t Monet suffer the same fate as The Velvet Sundown?
Velvet Sundown, Xania Monet
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A week after Monet’s streams hit their apex, Hallwood Media started securing radio play for her songs. In the first week — when her streams fell 24% — Monet’s songs were played just twice on broadcast radio, according to Luminate. But weekly spins rose to 109 the next week, then climbed to 423 and 485 in the next two weeks. By the most recent week (the period ended Oct. 16), Monet had something The Velvet Sundown didn’t: an aggregate radio audience of more than 1 million listeners.
Placed side by side, the charts representing The Velvet Sundown and Xania Monet show the difference between existing outside of the traditional music business and operating within it. Radio play helped turn Monet away from the cliff of disinterest and put her on a different trajectory. Without promotion, both radio and digital, it can be exceedingly difficult for any artist to maintain momentum — much less one created with AI.
Given the enormous stakes at play, when business leaders talk about AI, people listen.
In May, Dario Amodei, CEO of AI firm Anthropic — who stands to personally benefit from companies’ widespread adoption of his technology — gained widespread attention after he predicted that AI will wipe out half of all entry-level jobs within five years. And in music, Sony Music CEO Rob Stringer, in an annual presentation to investors, said the company is “going to do deals for new music AI products this year” and that it has “actively engaged with more than 800 companies” on various AI-related initiatives.
Perhaps most notable, at least on the music front, are the comments made about AI in various interviews given by Spotify CEO Daniel Ek in recent years. In them, he’s provided insights into how Spotify, the most valuable and important music platform in the world, approaches the technology. Ek’s comments carry weight: While generative AI platforms such as Suno and Udio have stirred the greatest amount of fear over AI’s ability to undermine human creativity, the largest music platforms will play a huge role in how both creators and listeners engage with it.
Understanding Spotify’s approach to AI doesn’t always require reading tea leaves. Some of its products that use AI are out in the open. For example, in 2023, the company launched two major products that utilize the technology: a personalized AI-powered DJ and a voice translation tool for podcasters that can translate recordings into other languages. Still, given that the company’s attitudes and approaches to AI will affect Spotify’s 678 million monthly users and millions of creators, it’s worth examining Ek’s statements to see how Spotify intends to incorporate AI, embrace opportunities and address concerns. To that end, this author examined 10 podcast interviews, numerous online articles and a 2024 open letter Ek penned with Meta CEO Mark Zuckerberg to get a better sense of how he views the technology. The one aspect about AI that Ek has talked about most often is its ability to help Spotify deliver to listeners the right audio — whether it’s music, a podcast or an audiobook — at a particular moment. He has described a mismatch between supply and demand, and how using new innovations can help better connect listeners and creators. Right now, Spotify users can search and find what they want 30% to 40% of the time, Ek told the New York Post in May, adding that he believes AI can improve that number. “So, we still have some ways to go before we’re at that point where we can just serve you that magical thing that you didn’t even know that you liked better than you can do yourself,” he explained. Most germane to people reading this article, the interviews show that Ek has consistently voiced a respect for creators and a belief that AI should enhance creativity, not replace it. That may not reassure songwriters who are receiving fewer royalties after Spotify adopted a lower royalty rate afforded to bundles in the U.S. Ek’s stated respect for artists also contrasts with the criticism Spotify has attracted — as detailed in the book Mood Machine and news reports — for paying flat fees for music tagged with fake artist names and inserted into playlists in order to reduce its royalty obligations. (Spotify denied claims that it’s created fake artists.) But in his public comments, Ek’s support for creators doesn’t waver, and there’s no indication that Spotify will follow in the footsteps of Tencent Music Entertainment, which offers music-making generative AI tools — it incorporates Chinese AI company DeepSeek’s large language model — and allows users to upload the resulting songs to its QQ Music platform. But AI can aid the creative process without stepping on creators’ rights, and Ek has talked with excitement about how AI tools can help lower barriers to entry and help musicians bring their visions to life. Although making music no longer requires learning and mastering an instrument, there’s still some technical know-how involved in producing music on digital audio workstations (DAWs). AI tools can reduce the complexity of DAWs and increase creators’ productivity. “We’re most likely going to have another order of magnitude of simplicity,” Ek said on the Acquired podcast in 2023. At the same time, Ek admits there are some frightening potential applications for AI. In 2023, he told CBS Morning that AI can make experiences in every field “better and easier,” while admitting that the notion that AI will be smarter than any human is “daunting to think about what the consequences might be for humanity.” And despite the potential for AI to unleash untold amounts of creativity, Ek admits that the ultimate outcome for creators is difficult to ascertain. “We want real humans to make it as artists and creators, but what is creativity in the future with AI? I don’t know,” he said in May at an open house at Spotify’s Stockholm headquarters, according to AFP. Just as lawmakers and music industry groups are pushing for legislation to protect artists’ names and likenesses, Ek has revealed concern about AI’s ability to replicate a musician’s voice. “Imagine if someone walked around claiming to be you, saying things that you’ve never said,” he told Jules Terpak in 2024. Spotify wouldn’t allow it on the platform without the artist’s permission, Ek said, citing Grimes — who launched a project in 2023 allowing fans to replicate her voice to use in their songs and evenly split the royalties — as an example of permissible use of an AI-generated name and likeness. “Of course, we will let her experiment, because she’s fine with it,” Ek said. Now that Spotify is in the audiobook business, the company’s use of AI will impact a wider swath of creators than just musicians. As Ek told The New York Post, Spotify “can play a role” in getting more books converted into audiobooks using AI — specifically smaller authors who can’t afford the expense of hiring someone to read them. Such affordable text-to-voice tools already exist and are offered to authors who would otherwise be locked out of the audiobook market. It makes sense: Just as Spotify was built on providing listeners the long tail of music, it doesn’t want its audiobook selection to be limited to major titles. If Spotify builds or buys such a tool, it could vastly increase the number of audiobooks available to its listeners. In the interview with CBS Morning, Ek quoted Microsoft co-founder Bill Gates to explain how he finds inspiration in innovation. “He says that the future is already here,” Ek said during the 40-minute talk. “It’s just not evenly distributed.” What Ek means is that he looks around the world, sees what others are doing with technology and then considers how he can bring those innovations to a wider audience. And as the CEO of the world’s largest and most influential audio streaming service, how he chooses to approach AI will go a long way in determining — for better or worse — how millions of people create, consume and profit from music, podcasts and audiobooks in the future.
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Consumer demand for live and out-of-home entertainment remains high, but Generation Z consumers — born between 1996 and 2020 — are particularly motivated to pay extra for convenience, upgraded experiences and sustainable options, according to a new EY survey. Perhaps not surprisingly, Gen Z is less patient than the average consumer. Nearly two-thirds (66%) of Gen Z respondents plan to buy a “fast pass” or priority pass to theme parks in the next year compared to 59% of all consumers, according to the inaugural EY Media & Entertainment (M&E) Pulse Poll, which surveyed 4,000 consumers across the U.S., U.K., Western Europe and the Asia-Pacific region. According to Javi Borges, EY global media and entertainment sector leader, companies that build convenience into their experiences can take advantage of consumers’ comfort with smartphone apps that offer digital ticketing and contactless payment and check-in. “When you look at the Millennials and Gen Z, there’s an expectation of a certain level of tech enablement and frictionless experience,” he says. “And even older generations post-pandemic, that maybe had never ordered Uber Eats until the pandemic, now they’re just much more accepting of the apps and the frictionless experience.” Speaking of Uber Eats, consumers’ desire for faster service is also reflected in a new McKinsey study, which found that delivery’s share of global food spending increased from 9% in 2019 to 21% in 2024, while takeaway’s share was flat and in-person dining fell to 55% from 69%. Though respondents weren’t polled specifically about music, this same trend toward speed and convenience can be traced in terms of modern-day music consumption habits, where streaming accounts for 69% of global music consumption in 2024 vs. 56% in 2019, according to the IFPI. And on the live front, concert promoter Live Nation says it now expects VIP offerings to account for 30% to 35% of its amphitheater business. Overall, McKinsey predicts that consumer tolerance for inconvenience will continue to decline as their desire for speed and service increases. Despite news headlines that consumers are at a financial breaking point, local entertainment (i.e., entertainment that doesn’t require travel) and live entertainment were purchased by 48% and 46% of respondents, respectively, according to EY’s poll. The poll focuses on companies’ pursuit of consumers’ “fun money,” which Borges calls the 10% to 15% of income people set aside for leisure activities. This segment of discretionary spending goes toward everything from music and video streaming services to concerts and vacations. “Globally, but especially in the U.S., we have more options battling for our fun money than ever before,” says Borges. Spending on live music, which offers an increasing menu of VIP options that provide greater convenience than basic offerings, is especially strong. As Billboard noted in May, a Bank of America study found that U.S. consumers spent an average of $150 a month on entertainment — such as live music and theme parks — from May 2024 to April 2025. Over the same period, credit card holders spent double that amount on live event tickets, racking up an average of $300 per month. In the same study, a third of respondents said they plan to attend more events this year than last year. Indeed, the trend in consumer spending — especially for the young, and especially since the COVID-19 pandemic — is toward experiences over material items. That said, people are willing to pay extra to make their experiences more pleasant or special. EY found that about half (49%) of respondents who visited theme parks or went on a cruise paid extra for premium options, while about a third did so for sporting events and casino/resorts. Younger demographics are also willing to spend a premium of 26% or more on sustainable features when it comes to buying entertainment experiences. For example, 12% of all consumers will spend more on carbon offsetting compared to 25% of Gen Z and 15% of Millennials. Willingness to spend extra based on water conservation practices also splits the age groups: 11% of all consumers globally, but 23% of Gen Z and 15% of Millennials. Live music has made strides to satisfy Gen Z’s preference for sustainable consumerism. Festivals are turning to batteries, sometimes powered by biodiesel or solar panels, instead of diesel-powered generators. That should be music to Gen Z ears: EY found that 24% of Gen Z would pay more for entertainment options that use renewable energy sources (versus 11% of all consumers) and 22% of Gen Z would pay a premium for lower energy consumption (versus 10% of all consumers). Looking ahead, Americans are more likely to spend money at a casino in the next year than people in other regions surveyed (66% versus 49% globally), while Asia-Pacific respondents have a greater preference for theme parks (74% versus 65% globally). About half (48%) of respondents expect to spend the same amount of money on live entertainment in the next 12 months as the past 12 months. The percentage of people who expect to spend more and spend less is almost equal at 21% and 20%, respectively.
If owning two versions of four of her Big Machine albums presents a challenge to Taylor Swift, it’s a great problem to have. Then again, it might not be a problem at all.
At first blush, it might seem that Taylor Swift’s decision to purchase her Big Machine master recordings presents her with a difficult decision. Does she emphasize the original versions or the high-profile re-recordings that many fans have purchased and streamed? Then again, Swift isn’t necessarily forced to choose between the two versions of her catalog. Conversations with multiple music industry veterans revealed there are many options for monetizing the Big Machine releases and getting the most out of her investment.
Swift’s immensely successful re-recordings, given the name “Taylor’s Version,” have amassed 15.8 million track equivalent albums (TEAs) in the U.S. so far, according to Luminate. But despite driving her fans to those re-recordings, the four Big Machine versions have continued to perform well. Year to date, the original versions of Fearless, Speak Now, Red and 1989 have a total of 331,000 track equivalent albums in the U.S. — about 40% as much as the re-recorded albums.
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When Shamrock owned the Big Machine masters, Swift effectively had veto power over requests for synch licenses. If a music supervisor wanted a track from one of her Big Machine albums, Swift, who is either the sole songwriter or a co-writer on every track, could refuse to grant permission for the publishing rights. And she announced her intention to do just that in an interview with Billboard after Ithaca bought her catalog in its 2019 Big Machine acquisition, saying she would license her music for movies and commercials only if she owned the master rights. That’s why a 2020 Match.com ad used a re-recording of “Love Story,” not the Big Machine original.
Owning the Big Machine masters opens the door for more synch licenses. Whether the music supervisor wants the original or the re-recording, Swift, as the sole owner of both versions, has a financial incentive to put her songs in ads, films, TV shows and movie trailers, says Bryan Calhoun, a marketing consultant. “I would say, ‘Hey, let’s go crazy. I own this stuff. Let’s go hard.’ And I would have some people dedicated to really being aggressive about going and getting licenses.”
Owning her Big Machine catalog will also create more synch opportunities because some directors and music supervisors will want Swift’s original versions. Michael Hausman, manager of Aimee Mann and ‘Til Tuesday, says Mann re-recorded her song “Wise Up” to keep 100% of the revenue. “It worked out well,” he says. “Most people probably could never tell the difference.” But some music supervisors “just don’t like the idea of a re-record and they want the original,” he adds, “even if there’s no difference” between the two.
Swift’s most fervent fans supported her re-recordings and, in some cases, showed solidarity in her feud with Scooter Braun, whose Ithaca Holdings acquired Big Machine, by avoiding the Big Machine originals. Her four Taylor’s Version re-recorded albums, stuffed with additional material and released in multiple variations, have sold a combined 6 million units to date in the U.S. across digital download and physical formats, according to Luminate. Sales and streaming executive Adam Abramson believes that Swift would similarly find a welcome response to reissues of the original albums.
“While the Swifties were happy to accept the re-records at that time so that they did not have to buy or stream the original, ‘problematic’ versions, I think most will be thrilled to be able to listen to the original albums as they were recorded at those respective points in Taylor’s life,” says Abramson.
Album reissues tend to coincide with anniversaries, and owning her Big Machine catalog gives Swift the opportunity to celebrate her original albums’ 20th anniversaries. Her self-titled Big Machine debut — which was not re-recorded — will turn 20 next year, followed by Fearless in 2028, Speak Now in 2030, Red in 2032 and 1989 in 2034. That gives Swift eight years to repackage her first five Big Machine albums. And considering how well her four re-recorded albums sold, it’s reasonable to think Big Machine anniversary editions could see a similarly strong response from fans.
Owning two versions also gives Swift additional streaming revenue. While Swift has pushed her re-recordings, the Big Machine versions had the benefit of inertia. The four original Big Machine albums have accumulated 406 million on-demand streams in the U.S. in 2025. That’s about two-fifths of the streams from the re-recorded albums, but that many streams — worth 293,000 TEAs — will generate well over $2 million in annual royalties in the U.S. alone.
News of the Swift purchase is an opportunity for digital service platforms (DSPs) to take advantage of fans’ interest, says Adamson. “I would not be surprised, and have already started to see, the DSPs highlighting her newly owned catalog again.” Indeed, on Wednesday (June 3), just four days after Swift announced the acquisition, Apple Music took to Instagram to encourage subscribers to delve into Swift’s entire catalog.
There’s also the lesson of Garth Brooks, who bought his Capitol Records masters in 2005 and took them off streaming and download stores. Brooks tightly controlled the availability of his catalog, first licensing the recordings to Walmart in 2005, then to Amazon in 2017. Brooks has also made deals with select retailers — Bass Pro Shops, Cabela’s, Dollar General — to sell his box sets. Downloads of his music were also made available at GhostTunes, an online music store launched by Brooks in 2014. Brooks could do whatever he wanted because he owned the masters.
Swift could take the Brooks route and do exclusive deals with digital and e-commerce platforms. But it seems more likely that she will capitalize on her unique ability to motivate consumers and maximize her catalog’s availability across all sales and streaming channels. Swift can arguably squeeze more out of her catalog than any one DSP or e-commerce platform, and she’ll do more with it than an investor like Shamrock. “It’s more valuable in her hands than in somebody else’s hands,” says Calhoun.
Now that all the major music companies have reported earnings for the quarter ended March 31, it’s a good time to reflect on the notable performances in the bunch. Most companies posted good results and showed that music is a reliable business during times of uncertainty, with nearly all trending in the right direction (though companies not mentioned here didn’t necessarily have something to crow about). But because companies naturally experience ebbs and flows — a slow new release schedule or heavy sales of low-margin vinyl records can wreak havoc on market perceptions — the results for any one quarter won’t tell the entire story.
Below, I run down a few notable and/or interesting highlights from the latest earnings releases. For a full recap of earnings reports, refer to Billboard’s 2025 Q1 earnings roundup, which provides quick summaries of music companies’ earnings reports issued from April 29 to May 28. Best top-line revenue growth: 22% by CTS Eventim
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German concert promoter and ticketing company CTS Eventim’s top-line revenue got a boost from its 2024 acquisitions of See Tickets and France Billet, as consolidated revenue jumped 22.0% to 499 million euros ($525 million). Growth of the existing business was “slightly higher” than a strong prior-year period, CFO Holger Hohrein said on the May 22 earnings call. Ticketing revenue improved 16.9% to 214 million euros, a record for the first quarter. Retail tickets sold improved 42.1% to 40.5 million. Live entertainment revenue increased 24% to 292 million euros ($316 million), also a first-quarter record. Best streaming growth, record label: 9.5% by Universal Music Group (UMG)
Subscriptions helped offset a lackluster 2.9% increase in other streaming revenue, including ad-supported streaming, resulting in overall streaming growth of 9.5%. UMG executives have told investors they can achieve long-term recorded music subscription growth of 8% to 10% through 2028. While the figure bounces from quarter to quarter — and has fallen well below the target range — UMG landed above the high end of the target by achieving recorded music subscription revenue growth of 11.5% in the first quarter. The subscription growth was “driven primarily by growth in the number of subscribers, and to a much lesser extent, helped by certain price increases,” COO Boyd Muir said during the April 29 earnings call. Best subscription growth, streaming platform: 16.6% by Tencent Music Entertainment (TME)
TME’s subscription growth dominated the quarter for two reasons. First, average revenue per user improved 7.5% to $1.57, in part from the popularity of the Super VIP tier that costs five times as much as a normal subscription. Second, the number of subscribers grew 8.3% to 122.9 million. With more people paying a higher monthly fee, subscription growth rose to 17%. The ripple effects could be seen elsewhere: gross profit margin rose to 44.1% from 40.9% in the year-ago period, and the percentage of paying subscribers versus all music users improved to 22.1% from 19.6% a year earlier. Most surprising new business segment: Tencent Music Entertainment’s physical music sales.
In the first quarter, TME had a 10-day “head-start presale” of the Teens in Times album Beyond Utopia. TME also sold physical albums for One Hundred Thousand Volts by Silence Wang. For the K-pop artist G-Dragon, TME conducted a presale of light sticks and other products and offered limited-edition merchandise to buyers of his digital albums. Most impactful executive quotes: Sphere Entertainment Co. Executive chairman/CEO James Dolan and Vivid Seats CEO Stan Chia
Two vastly different companies provided contrasting takes on the state of live music demand. Amidst reports of falling international tourism to the U.S., Sphere Entertainment Co. CEO James Dolan downplayed concerns about visits to Las Vegas and attendance at the Sphere venue. Even if tourism took a hit, Dolan explained that “demand exceeds capacity, so we have room to absorb any issues from that.”
On the other hand, Stan Chia, CEO of secondary tickets marketplace Vivid Seats, described a more challenging landscape. The quarter “fell short of our expectations,” he said during the May 6 earnings call. Chia blamed the shortfall on “robust competitive intensity” and “softening industry trends amidst consumer uncertainty.” What’s more, he added, “economic and political volatility has impacted consumer sentiment, and this uncertainty can also impact how and when artists and rights holders go to market.” A 14% decline in revenue, combined with Chia’s comments and the company’s suspension of full-year guidance, caused a 38% one-day decline in Vivid Seats’ share price.
Companies frequently urge investors not to read too much into any one quarter’s results. After all, even large, diversified businesses don’t always take a neat, linear path to consistent annual gains, and any single reporting period can contain oddities that skew the results favorably or unfavorably. But most public companies report results every quarter and, for better or worse, we onlookers read as much into the results as possible.
With that caveat in mind, here are some takeaways from the earnings releases through Thursday (May 15). Note that while most music companies, including the largest ones, have already issued earnings, there are a couple more to come: CTS Eventim will release some first-quarter figures on May 22 and Reservoir Media reports on May 28.
1. Some Margins Improved from Cost Savings
Music companies — like employers across the spectrum — have thinned their headcounts to retool, refocus and ultimately cut down on expenses. Q1 results showed some notable improvements in companies’ bottom lines.
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Spotify started seeing bottom-line growth in 2024 after cutting about a quarter of its headcount in 2023. The Stockholm-based music and podcast giant’s operating margin rose to 12.1% from 4.6% in the first quarter of 2024 — an improvement of 341 million euros ($380 million) — while gross margin (gross profit as a percentage of revenue) rose to 31.6% from 27.6%. Gross margin is a good proxy for what Spotify keeps after paying for content costs (it also includes some smaller expenses such as credit card transaction fees and hosting costs). After keeping prices flat for more than a decade, gross profit improved after Spotify began raising prices in 2023.
Operating profit, not gross profit, shows the impact of layoffs (salary expenses are deducted from gross profit to calculate operating profit). Spotify’s operating profit, as a percentage of revenue, improved to 12.1% from 4.6% in the first quarter of 2024. That’s a huge improvement in 12 months, but it’s more remarkable considering the company’s operating profit percentage was negative 5.1% in the first quarter of 2023. CEO Daniel Ek’s controversial decision to make Spotify “relentlessly resourceful” by eliminating thousands of jobs has paid dividends for the company.
Lower expenses also helped the Sphere venue in Las Vegas show improvement in operating margin. Sphere’s sales, general and administrative expenses fell 12% as the company identified costs to reduce, including corporate support functions, Sphere Entertainment Co. CFO Robert Langer said during the May 8 earnings call. That helped offset a 12.8% decline in revenue due to fewer events being hosted by the one-of-a-kind venue. The opposing growth rates cancelled each other out, and Sphere’s operating income was flat in the quarter. Investors apparently liked Sphere’s ability to reduce costs: The share price of its parent company, Sphere Entertainment Co., surged 6% the day of the earnings release.
Over at Universal Music Group (UMG), which embarked on a cost savings plan in early 2024, the company’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin was flat at 22.8%. Though the company’s global head count rose slightly to 10,346 on Dec. 31, 2024, from 10,290 on Dec. 31, 2023, according to its annual reports, the amount spent on salaries and benefits fell 14% to 1.79 billion euros ($1.94 billion) in 2024.
As for the other two majors, Sony’s operating margin improved to 18.0% from 16.9%, while the operating income before depreciation and amortization (OIBDA) margin at Warner Music Group (WMG) fell to 20.4% from 20.9%, due primarily to a change in revenue mix (meaning there was a higher proportion of low-margin physical sales compared to the prior-year period), though it was partially offset by savings from restructuring. WMG’s operating margin jumped to 11.3% from 8.0% due in part to a decrease in restructuring charges incurred in the prior year.
2. Subscriptions Lead the Way
Two companies had impressive subscriber gains in the quarter.
Spotify’s Premium revenue was up 16% year-over-year, and average revenue per user (ARPU) was up 4%. Subscription revenue was 90% of Spotify’s total revenue, the highest mark since Q3 2020 when advertising dried up — and subscription revenue exploded — at the onset of the pandemic. In fact, subscriptions have been Spotify’s workhorse in recent years, with subscription revenue growing 39.0% over the past two years compared to 27.4% for advertising revenue. After two rounds of price increases in the U.S. and U.K., plus hikes in many other countries, ARPU grew 9.5% in that two-year span.
Meanwhile, at Tencent Music Entertainment (TME), subscription revenue was up 16.6% and ARPU was up 7.5%. TME did not provide an updated subscriber count for its Super VIP tier — it’s still listed at 10 million-plus — but the company did disclose that high-quality audio and other perks are driving Super VIP conversions. Given that Super VIP costs five times the normal subscription price, it makes sense that it was the primary driver of the 7.5% jump in ARPU.
This is a case of the spoils going to the two largest music subscription services by subscriber count. MIDiA Research’s music subscription market shares for Q4 2024 put Spotify at No. 1 with 32% and TME at No. 2 with 15%. Spotify finished Q1 with 268 million paying customers (plus another 423 million ad-free listeners), while TME had 122.9 million.
Some other subscription services have been performing well, too, although only one other publicly traded music streaming company has released detailed financial statements for Q1. A revealing comment came from UMG, which saw double-digit revenue growth from four of its top 10 streaming partners and high single-digit growth at a fifth, the company said during its April 29 earnings call. Billboard believes two of the top four partners were likely Spotify and TME. The other double-digit growth services are anyone’s guess, but it probably wasn’t Deezer — the company’s total revenue rose just 1% in Q1 as its subscriber count fell 5.4%.
3. Advertising revenue was unsurprisingly mediocre but not terrible.
With the subscription business booming, there’s less pressure on the advertising side of music streaming to deliver value for platforms and rights owners. Good thing, too, because advertising hasn’t delivered much growth lately. In the U.S., advertising-based streaming royalties’ share of total recorded music revenues fell to 10.4% in 2024 from 10.9% in 2023 and 11.4% in both 2021 and 2022.
The numbers looked better in Q1 for Spotify, whose ad revenue rose 8% year-over-year (5% at constant currency). But because Spotify’s subscription business is faring better, advertising’s share of Spotify’s total revenue fell to 10.0% from 10.7% in the prior-year period. In fact, 10.0% was the lowest share for Spotify’s advertising since the early pandemic — 8.0%, 6.9%, and 9.4% in Q1, Q2, and Q3 of 2020, respectively.
Advertising is the lifeblood of the radio business. That explains why radio companies’ stock prices have fallen sharply over the last two years. iHeartMedia revenue rose 1% on the strength of a 16% gain in digital revenue, although the multi-sector segment that houses its broadcast radio business was down 4%. U.S. tariff policy has injected uncertainty into media companies’ outlooks, but iHeartMedia CEO Bob Pittman said on Monday (May 12) that iHeartMedia was seeing “generally stable ad spend.”
The same story played out at other radio companies: Total revenue change wasn’t bad because digital gains helped compensate for losses in broadcast ad revenue. Cumulus Media’s revenue fell 6.4% as broadcast dropped nearly 11% and digital gained 6.1%. Townsquare Media’s revenue fell 1% as gains in digital advertising (up 7.6%) and subscriptions (up 4.2%) almost offset a 9.1% decline in broadcast advertising.
