Universal Music Gets Strong Subscription Growth as Revenue Rises 12% in First Quarter (2025)

Strong subscription revenue helped Universal Music Group’s first quarter revenue rise 11.8% year over year (or 9.5% in constant currency) to 2.9 billion euros ($3.05 billion at the average exchange rate in the first quarter), the company announced Tuesday (April 29). Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) also rose 11.8%, to 661 million euros ($695 million). Adjusted EBITDA margin was flat at 22.8%.

Recorded music revenue improved 12.7% to 2.24 billion euros ($2.36 billion). Within that segment, subscription revenue grew 11.5% to 1.25 billion euros ($1.31 billion) due primarily to an increase in the number of subscribers while price increases played a lesser role, COO Boyd Muir said during Tuesday’s earnings call. Subscriber growth came in markets such as the U.S. and Japan with high average revenue per user (ARPU). Muir also attributed subscription gains to better conversion of free users into paying customers in emerging markets such as China.

Subscription growth also came from a diversity of platforms, added chief digital officer Michael Nash. UMG received double-digit revenue growth from three of its top five subscription services and had high single-digit growth from another top five platform, Nash said. UMG’s guidance calls for 8-10% annual subscription revenue growth through 2028, although Muir cautioned that growth would come in waves due to price increases — standard tiers as well as super-premium options — over that period.

Other streaming revenue — such as ad-supported streaming — rose just 2.9% to 353 million euros ($371 million) as consumption continued to shift to short-form video platforms that produce lower royalties than better monetized video platforms. Ad-supported streaming revenue had a favorable comparison to the prior-year quarter because UMG was off TikTok for two months in the first quarter of 2024.

Vinyl sales in the U.S. and Europe helped physical revenue jump 17.6% to 300 million euros ($316 million). Despite a strong release slate, Muir said the company expects physical sales to remain flat in 2025 due to “a challenging two-year comp.” Licensing and other revenue improved 33.3% to 296 million euros ($311 million).

In the music publishing segment, total revenue grew 11.9% to 555 million euros ($584 million). Digital revenue jumped 19.4% to 339 million euros ($357 million) due to continued growth in streaming and subscription platforms. Performance revenue was flat at 114 million euros ($120 million), which the company attributed to higher PRO payouts in the U.S. and stronger live activity in Europe in the prior-year quarter.

Merchandising revenue dropped 1.8% to 112 million euros ($118 million). The decline in touring-related merchandise sales was partially offset by growth in direct-to-consumer sales.

“I’m incredibly excited by our strong start for this year,” said chairman/CEO Lucian Grainge. “Despite the economic uncertainty in the world, we remain confident, not only in our performance, but in the resiliency of our global business.”

A key development in the development of the streaming market is the long-awaited super-premium subscription tier. Earlier in the day, Spotify CEO Daniel Ek seemed to put the onus for this high-priced, high-value tier on rights owners. “We want to make it happen,” Ek said during the company’s first quarter earnings call. “For the super fan, we do need the partners to come to the table and be part of this journey.”

When asked about Ek’s comments, Nash said UMG was “very encouraged” to hear that Spotify executives see “great potential” in higher-priced tiers and is “deeply engaged with all of our key partners, including Spotify,” on super-premium tiers.

Here are UMG’s first quarter highlights: