PRS Hits Record Live Revenue, Texas Investigates Streaming Payola, Spotify Subscriber Growth Meets Ad Revenue Pressure
How The Music Business Works - Issue #59
Welcome back to How The Music Business Works.
This past week’s developments highlight how revenue growth, legal frameworks, and royalty structures continue to shape the music industry. New financial results from PRS for Music point to expanding collections across live, digital, and international markets, with more creators earning royalties across a growing repertoire of works.
At the same time, legal and contractual questions remain central. US courts have reaffirmed the requirement for human authorship in copyright protection, while disputes over how streaming income is calculated under older recording agreements continue to surface.
Together, these stories reflect how money, ownership, and rights are being defined across an industry adapting to both technological change and evolving business models.
PRS for Music reports £1.24bn revenue and record live income in 2025
PRS for Music reported £1.24 billion in revenue for 2025, up 7.7% year-on-year, with £1.07 billion distributed to songwriters, composers, and publishers. Live music collections exceeded £100 million for the first time, reaching £101.4 million, a 13.2% increase from 2024, with more than 37,600 members earning royalties from performances. Public performance income, including live and background music in venues like shops and restaurants, rose 9.1% to £313.4 million. Online royalties reached £447.2 million, up 9.6%, driven by streaming revenue of £351.4 million and video-on-demand income of £77.2 million. International revenue totaled £367.3 million, up 4.2%, with Europe generating over £200 million and North America accounting for 28% of collections. PRS paid royalties across 7.8 million works, including 4,541 creators receiving payments for the first time in 2025.
Texas launches payola probe into music streaming services
The Attorney General of Texas, Ken Paxton, has opened an investigation into alleged payola practices involving major music streaming platforms, including Spotify, Apple Music, Amazon Music, Pandora and YouTube Music. The probe focuses on whether streaming services entered undisclosed financial arrangements with labels or other music companies that resulted in certain artists or tracks receiving preferential playlist placement, recommendation ranking or visibility, potentially violating Texas law. Paxton said artists should compete on a level playing field and listeners deserve transparency over what is being promoted to them. The investigation also revives scrutiny around Spotify’s Discovery Mode, which offers algorithmic promotion in exchange for lower royalty rates, and wider concerns around stream manipulation, paid playlisting and undeclared promotional activity across the streaming economy.
Spotify reports subscriber growth but ad revenue weakens in Q1
Spotify posted 293 million subscribers in Q1 2026, up 9% year-on-year, while monthly active users reached 761 million, a 12% increase. Revenue rose 8% to €4.53 billion, driven primarily by premium subscriptions, which generated €4.15 billion. However, ad-supported revenue fell 5% year-on-year and 25% quarter-on-quarter to €385 million, despite continued expansion across podcasts, video, audiobooks, and the free tier. Gross profit rose 13% to €1.5 billion, while operating income increased 40% to €715 million. The company expects slower subscriber growth in Q2, forecasting 299 million subscribers and 778 million MAUs. Investors reacted negatively, with Spotify shares falling sharply following the earnings release, reflecting concerns around advertising performance and growth expectations.
Universal and Sony push for access to Warner’s Suno licensing deal
Universal Music and Sony Music are seeking court access to the terms of Warner Music Group’s licensing agreement with AI music platform Suno as part of their ongoing copyright infringement case against the company. Warner previously settled with Suno and entered a licensing arrangement allowing use of copyrighted recordings for AI training, while Universal and Sony continue litigation. The two majors argue the agreement is central to Suno’s fair use defence, which claims no viable market exists for licensing recordings as training data. They say the Warner deal directly undermines that argument by proving such a market exists. A magistrate judge initially denied the request, citing limited relevance and concerns over chilling settlements, but Universal and Sony have formally objected and are pushing for disclosure.
Labels drop $2.6bn copyright lawsuit against Verizon after Supreme Court ruling
Universal Music Group, Sony Music Entertainment, Warner Music Group and ABKCO have jointly dismissed their copyright infringement lawsuit against Verizon following the US Supreme Court’s ruling in the Cox Communications case. The labels had accused Verizon of knowingly allowing subscribers to use its network for large-scale piracy, alleging more than 340,000 infringement notices had been sent since 2020 and seeking over $2.6 billion in statutory damages. The dismissal was filed with prejudice, meaning the claims cannot be brought again. The decision follows the Supreme Court’s unanimous ruling that internet service providers cannot be held contributorily liable for user infringement unless they actively induce piracy or provide services specifically designed for infringement. The ruling significantly weakens the legal basis for similar ISP liability cases across the music industry.