The global recorded-music market is entering a new era in which revenue growth is expected to come more from price increases and better monetization rather than from a continued surge in new subscribers.
After more than a decade of rapid adoption, streaming penetration in developed markets appears to have largely run its course. With the majority of consumers already subscribed to platforms, the industry is entering a period where raising prices and extracting more revenue per user will be central to future expansion, according to analysts at MoffettNathanson.
MoffettNathanson highlights that streaming platforms have already begun nudging subscription fees higher. In the U.S. and the U.K., Spotify has implemented a second round of price increases within an 18-month span. During the growth phase of streaming, Spotify benefited from rapidly rising revenue and widening gross margins, while major record labels lagged behind. That dynamic is now shifting - labels are positioned to capture a larger portion of industry monetization as wholesale royalty rates reset, a development the firm says is underappreciated by investors.
Reflecting this view, MoffettNathanson started coverage with Buy ratings on both Universal Music Group and Warner Music Group, identifying labels as the clearest beneficiaries of a pricing-led phase. In Warner Music's case, the brokerage pointed to several supportive factors: explicit guidance that wholesale-rate benefits should materialize in 2026, the lack of foreign-exchange headwinds, and room for near-term margin improvement. On an enterprise-value-to-EBITDA basis, Warner trades at a pronounced discount relative to Universal, the firm noted.
Universal Music also received a Buy rating. MoffettNathanson expects streaming revenue could outperform current forecasts and suggested the company's valuation might gain further if it proceeds with a U.S. listing.
Not all names were viewed favorably. Spotify was assigned a Neutral rating. The analysts warned that market expectations for margins in 2026 through 2028 appear optimistic in light of a new round of music-rights agreements. They also expressed doubt about Spotify's ability to meaningfully scale advertising revenue without shifting toward video - a move that could require higher investment and introduce brand-related risk.
Sirius XM was likewise rated Neutral. MoffettNathanson said the stock reflects investor worries over subscriber trends and the cost of content. While the firm acknowledged upside potential if subscriber losses stabilize, it suggested investors should await clearer evidence of a turnaround before committing additional capital.
This analysis underscores a broader industry pivot: with subscriber growth slowing in mature markets, value capture through pricing and wholesale-rate resets will play a larger role in shaping profitability across streaming platforms and record labels.