Universal Music Will Continue as an Industry Leader, but Growth Should Slow as Streaming Matures

Universal Music should be a primary beneficiary of ongoing music industry growth we expect. Fears about artificial intelligence-generated music have recently sparked concern that these recordings will take share from the human artists on which Universal relies, but we think these concerns are overstated. Unless consumers are willing to forgo human-created music, the power Universal has over “real” music gives it leverage to continue taking its historical share of revenue on subscription streaming platforms. However, we’ve become less optimistic about the likelihood that streaming revenue continues growing it the rate it did during the first half of the 2020s.