Nigerian artists face uncertainty as Universal Music slower streaming growth

Universal Music Group, the leading music label backing Don Jazzy’s Mavin Records, has seen its shares drop over 20% amid intense competition in the streaming market.

The Netherlands-based Universal Music Group (UMG), representing top artists such as Taylor Swift, Drake, Justin Bieber, and Adele, experienced this significant decline shortly after the market opened on Thursday.

This drop followed the company’s below expectation results in its streaming and subscription businesses.

On the earnings call, UMG Vice President and CFO Boyd Muir attributed the year-over-year slowdown in subscription growth to “the timing of price increases” from its partners. UMG’s partners, including Spotify, Amazon Music, and Apple Music, have raised prices in recent years, which has helped UMG generate additional revenue from its subscription business.

“The other factor impacting our subscription revenue growth this quarter is the slowdown in subscriber growth at certain platforms, which is occurring while the overall subscription marketplace continues to experience significant growth in subscribers globally,” Muir added. “While Spotify, YouTube, and many regional and local platforms have continued to exhibit healthy growth in subscribers, other large partners who have been less successful in driving global adoption have seen a slowdown in new subscriber additions.”

The executive did not specifically call out which platforms were seeing a downtick in subscribers but did say the company is “engaged with all of our key partners” in dialogue regarding product innovation.

Earlier this year, UMG implemented a restructuring plan aimed at generating €250 million in annual savings by 2026, which included job cuts.

Deals with social media platforms have become problematic for Universal Music Group (UMG) in recent months. In May, UMG ended its partnership with Meta Platforms (META), which was licensing premium music videos for Facebook. Management stated that the offering “was less popular with Facebook’s user base than other music products.”

UMG recently acquired a majority stake in Mavin Global Limited (Holdco), founded by Don Jazzy, to enhance its full-service offering in Nigeria through UMG’s global network. Mavin is currently distributed internationally through Virgin Music Group.

Its artists, including Rema and Ayra Starr, are already well integrated into UMG’s network, with signings across U.S. labels such as Republic and Interscope.

Mavin’s roster features notable artists like Ayra Starr, Ladipoe, Johnny Drille, Crayon, Magixx, Bayanni, Boy Spyce, DJ Big N, Lifesize Teddy, and Rema.

Rema’s hit single “Calm Down” [featuring Selena Gomez] reached No.3 on the U.S. Billboard Hot 100, becoming the biggest Afrobeats song of all time and the most viewed video by an African artist on YouTube, as well as the first African artist-led track to surpass 1 billion Spotify streams.