This week, we’ll examine how music streaming is entering a new phase. This topic is raising concerns not only for Spotify but also for the major labels and the broader music industry. Let’s dive into what’s currently happening in the world of music streaming!
#1. Epidemic Sound Bets on AI to Solve Music’s “Black Box” Problem
Epidemic Sound has taken another strategic step in the music tech world by acquiring a US startup specializing in AI-powered music recognition. The goal? To more accurately track unclaimed uses of music in user-generated content on platforms like TikTok and YouTube, and finally monetize the industry’s infamous “black box” of royalties, worth millions of dollars.
With this acquisition, Epidemic is launching Aentidote, a tool boasting up to a 95% success rate in identifying tracks used in remixes, covers, and live recordings. It could revolutionize rights management and provide rights holders with fairer compensation.
Epidemic aims not only to bring more transparency to rights holders but also to strengthen its central role in the booming creator economy. The strategy is clear: make music traceable, and ensure artists finally get paid.
#2. Universal-Downtown: The European Commission Steps In
The European Commission has launched an investigation into Universal Music Group’s $775 million acquisition of Downtown Music Holdings. IMPALA, the European organization representing independent music companies, welcomed the move and raised concerns that the deal could harm competition, diversity, and artists themselves.
Why? Because UMG’s Virgin Music would gain control of Downtown’s vast service portfolio, potentially disrupting the market balance in several countries. IMPALA sees this as part of UMG’s broader expansion strategy, following previous acquisitions like [PIAS] and 8Ball Music.
UMG remains confident that the deal will close later this year. But for the independents, the message is clear: it’s time to slow down the major labels’ ambitions to protect an open and diverse music ecosystem.
#3. Spotify Delays (Again) Its Super-Premium Tier
Despite steady growth (678 million monthly users, including 268 million paying subscribers) Spotify remains vague about the launch of its long-awaited super-premium tier aimed at superfans.
The delay appears tied to a mix of challenges: licensing complexities, cautious economic conditions, limited user interest (only 45% say they’d consider it), and, most notably, heavy reliance on industry partners who remain hesitant.
When asked during the company’s earnings call, CEO Daniel Ek gave an evasive response. For now, Spotify seems focused on its existing offerings, keeping the super-premium option on hold.
#4. Universal Music Group experiences Solid Growth and Ongoing Challenges
In Q1 2025, Universal Music Group (UMG) reported $3.30 billion in revenue, driven by an 11.5% increase in subscription income. Streaming remains the dominant source, accounting for the majority of revenue at $1.61 billion. However, despite price hikes and strategic acquisitions, UMG continues to face challenges, particularly around monetizing the freemium model.
UMG's growth was fueled by double-digit revenue increases in key markets like Japan, Germany, China, and Mexico. Meanwhile, vinyl sales and licensing revenue also rose significantly, although merchandise sales saw a slight dip.
Publishing posted a solid performance as well, with revenue up 11.9%. Still, the company implemented organizational changes, including $142 million in budget cuts. While executives are highlighting Spotify’s renewed interest in a Super-Premium tier, questions remain about the long-term trajectory of the streaming industry and its monetization hurdles.
#5. Music Fandom: A Strategic Shift Amid Economic Uncertainty
As trade tensions reignited by Donald Trump fuel global economic instability, the music industry finds itself needing to adapt. While streaming subscriptions remain strong and largely unaffected by market turbulence, other revenue streams, like vinyl and merchandise, are showing signs of strain. Heavily reliant on imports, especially from China (subject to tariffs of up to 145%), these products are becoming more expensive to produce and purchase. With fans growing increasingly cautious in their spending, such non-essential “extras” may end up on the chopping block.
In this climate, labels must rethink their approach to fandom monetization. Rather than chasing short-term profits, now may be the time to focus on long-term fan loyalty. The rise of “super premium” streaming tiers—welcomed by a majority of subscribers willing to pay more for an enhanced experience—offers a promising path forward. As audiences become more selective in their spending, building a lasting and engaging relationship with fans could be the key to resilient growth.
