Music Industry Giants Report Record Revenues as AI Battles Escalate
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The global music industry continues to demonstrate robust growth, wiht major players reporting notable revenue gains in the final quarter of 2025. Concurrently, a contentious debate is brewing over the future of artificial intelligence in music, as established labels and innovative startups clash over control and creative freedom.
Major Labels Announce Impressive Q4 Earnings
Warner Music Group (WMG) and sony Music Entertainment both announced record-breaking financial results for calendar Q4 2025. WMG reported quarterly revenues of $1.84 billion, a 7.1% year-over-year increase at constant currency, driven by strength in both recorded music and music publishing. Notably, recorded music subscription streaming revenues jumped 10.9% YoY. “High-single-digit revenue growth reflects broad-based strength across Recorded Music and Music Publishing,” a company release stated.
Sony’s global music rights operation surpassed a significant milestone, generating $3.01 billion across recorded music and publishing – the first time the company has exceeded $3 billion in a single quarter. This represents an 11.4% year-over-year increase. according to Sony, this growth was fueled by streaming revenue, and also increased participation in live concerts and merchandise sales.The company generated approximately $309 million more in Q4 2025 than in the prior-year quarter.
UMG and suno Clash Over “Walled Gardens” in AI Music
The rise of AI music generation is sparking a public relations battle between Worldwide Music Group (UMG) and AI music firm Suno. The dispute centers around the concept of “walled gardens” – platforms where AI-generated music cannot be downloaded or distributed outside the platform – championed by UMG.
Following a settlement with Suno rival Udio in October 2025, UMG introduced this model, aiming to protect copyright and control the distribution of AI-generated content.Though, Suno, led by ex-major label executive Paul sinclair, now Chief Music Officer, advocates for “open studios” that prioritize creative freedom. Sinclair penned a linkedin memo arguing against the restrictive approach, emphasizing the importance of unrestricted access to AI-generated music. Udio initially disabled downloads, giving users 48 hours to retrieve previously created tracks before implementing the restrictions.
DistroKid Explores Potential Sale
Independent distribution platform DistroKid is reportedly exploring a sale, with a potential price tag of $2 billion or higher. The company has engaged investment banks Raine and Goldman Sachs to manage the process. This news comes amid a flurry of activity in the music industry, including BMG’s discussions to acquire Concord and Sony Music Group’s joint venture with GIC for a $2 billion+ catalogue-buying fund.
ElevenLabs Secures $500 million in Funding
AI audio startup ElevenLabs, creator of AI music platform Eleven Music, has raised $500 million in a Series D funding round, valuing the company at $11 billion – more than triple its valuation from a year ago. The round was led by Sequoia Capital, with significant participation from Andreessen Horowitz and ICONIQ. This investment underscores the growing interest and financial backing for AI-driven music technologies. The funding arrives six months after the launch of Eleven Music, a direct competitor to Suno and Udio.
