The music subscription business will continue to grow through 2026 thanks to customer acquisition, price increases and the launch of high-priced superfan tiers, according to a new report by Guggenheim analysts who cover public music companies.
A wave of price increases in 2022 and 2023 subsided in 2024, leading to lower — but still substantial — revenue growth rates in 2025. Recently announced quarterly results have showed “healthy industry-wide trends” despite “minimal” benefits from price increases, analysts wrote in the report released Wednesday (Aug. 13). Warner Music Group and Universal Music Group both reported solid subscription revenue growth of 8.5% for the quarter, while Sony Music (which does not break out subscription figures) saw streaming growth of 7.3%.
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Guggenheim estimates that the number of streaming subscribers grew 11.6% in the second quarter, which compares well to the previous five quarters (which ranged from 12.0% to 12.8%). Analysts say Spotify and YouTube Music had the best growth, while Amazon Music, Apple Music and Tencent Music Entertainment (TME), as well as smaller services such as Pandora and Deezer, had below-average growth.
Looking ahead, Guggenheim sees ample potential subscribers in both mature and developed markets. Its analysts expect subscriber growth to remain in the double digits through the end of 2025 — 11.1% and 10.1% in the third and fourth quarters, respectively — and “gradually decelerate over time.”
While global growth rates remain in the double digits, subscriber and revenue growth have slowed in large markets such as the U.S., where subscription revenue growth fell to 5.3% in 2024 from 10.6% in 2023, and growth in subscribers fell to 3.3% from 5.7%, according to the RIAA. A similar trend was seen in the U.K., the world’s third-largest recorded music market, where subscription revenue growth fell to 5.9% in 2024 from 8.1% in 2023, according to BPI.
Recent and upcoming price increases will provide revenue growth for streaming services and rights holders. The analysts say fourth quarter revenue will get an assist from Spotify’s decision, announced on Aug. 4, to raise prices in “multiple markets” across Europe, Asia-Pacific, Africa, the Middle East and South Asia. Guggenheim and many other analysts expect subscription revenue growth in 2026 to come from subscription service price increases following record labels’ recent licensing renewals.
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While Guggenheim expects much-awaited superfan tiers to launch in 2026, only one subscription service, TME, has launched one to date, with the Chinese streaming leader revealing on Monday (Aug. 11) that it had 15 million subscribers to its Super VIP tier at the end of June. Spotify chief business officer Alex Norström explained during the streamer’s July 29 earnings call that the company is building “something great” for superfans, “but it’s taking time” to produce something up to Spotify’s “high value standards.”
Superfan offerings, which will provide heightened experiences and features for a higher price, are expected to boost streaming services’ average revenue per user (ARPU) and return additional royalties to rights holders. Super VIP is having the expected effect on TME’s ARPU, which increased 9.3% on 6.3% subscriber growth in the second quarter. Without a superfan tier to provide a lift, Spotify’s ARPU increased 3% (in constant currency) with 12% subscriber growth.
