Universal Music's underlying subscription growth sped up to 9.5% as prices and subscribers rose

Universal Music Group said on October 29, 2026, that its revenue from paid streaming subscriptions grew faster in the third quarter, helped by wholesale price increases and more subscribers. Leaving out Downtown, the music company it bought in February, subscription revenue rose 9.5% at constant currency in the three months to September 30, compared with 6.7% in the second quarter. With Downtown included, it rose 19.2% at constant currency to €1,422 million.

The rest of the business grew more slowly. Group revenue rose 12.3% to €3,394 million, or 11.7% at constant currency. Excluding Downtown, growth was 5.3%, below the 6.4% UMG reported on the same basis for the second quarter. Adjusted EBITDA rose 9.0% at constant currency to €729 million, and the adjusted EBITDA margin excluding Downtown widened 0.4 percentage points to 22.4%.

This quarter showed clear progress: subscription revenue growth accelerated, and Adjusted EBITDA margin excluding Downtown expanded by 40 basis points, led by stronger margins in Recorded Music.

Where the money came from

Recorded music, which covers streaming, physical sales and licensing, grew 14.7% at constant currency, or 7.4% without Downtown. Ad-supported streaming grew 13.5%, but only 4.7% without Downtown. Physical formats were the other strong line, up 17.4% at constant currency, with UMG citing growth in North America, Japan and Europe, while downloads kept shrinking. UMG named Mrs. Green Apple, Olivia Rodrigo, Stray Kids, Ariana Grande and The Beatles among the quarter's top sellers.

Recorded music adjusted EBITDA rose to €640 million from €553 million. Excluding Downtown, the division's margin widened 1.2 points to 26.2%, which UMG attributed to lower A&R spending relative to revenue and cost discipline. Music publishing revenue grew 7.5% at constant currency, or 1.5% without Downtown, and merchandising fell 4.6%, mainly because of lower touring income.

Prices and subscribers

UMG credited both levers for the faster subscription growth: wholesale price increases and subscriber growth, along with pricing benefits from what it calls its Streaming 2.0 agreements. It also said market share headwinds had eased compared with the first half of 2026. On the subscriber side, Spotify reported 306 million Premium subscribers on October 22, up 9% from a year earlier (our report).

The gap between the two growth rates matters for reading the quarter. Subscription revenue sped up, but total revenue growth without Downtown slowed. On UMG's figures, the main reason was license and other revenue, which fell 2.8% without Downtown after rising 32.7% in the second quarter, when UMG cited outsized audiovisual and live income. Ad-supported streaming, up 4.7%, and merchandising, down 4.6%, also kept total growth below the subscription rate, although both did better than in the second quarter.

Downtown also makes a large difference to the headline figures. Comparing growth with and without it, Downtown accounted for roughly half of the 19.2% rise in subscription revenue and more than half of the group's 11.7% constant-currency growth (our calculation). Over the first nine months of 2026, group revenue was €9,588 million, against €8,902 million a year earlier.

The Downtown deal

Downtown's results are included from February 20, 2026, the date of the acquisition. Downtown, headquartered in the U.S., provides services to independent record companies and artists and publishing services to songwriters, according to the European Commission, which cleared the purchase on February 13 on condition that Downtown's royalty accounting platform, Curve Royalty Systems, is sold in full.

The Commission found that Curve stores commercially sensitive data of rival labels that UMG could otherwise have been able to access. An independent trustee monitors the commitments, and the Commission said it would approve a buyer for Curve in a separate procedure.