Majors are Reclaiming Spotify Just as AI Hits the Play Button

The music industry reached a fever pitch this week as regulatory hurdles finally cleared for one of the largest acquisitions of the year. Following a process that spanned over fourteen months, the European Commission has officially approved Universal Music Group’s 775 million dollar acquisition of Downtown Music Holdings. This move solidifies UMG’s Virgin Music Group as a dominant force in the global distribution and publishing space.

Strategic Divestments and Independence

The approval did not come without specific conditions. To satisfy competition regulators, Universal has committed to divesting Downtown’s Curve royalty accounting business. This ensures that the major label does not gain access to commercially sensitive data from its competitors.

While the majors are expanding, the independent sector is also seeing massive capital infusions. Create Music Group recently announced a 300 million dollar investment in the Vancouver based Nettwerk Music Group. This deal is unique because it facilitates a management buyout, allowing the veteran indie firm to retain its operational independence and leadership while leveraging Create’s substantial infrastructure and capital.

A New Era for AI and Market Share

Technology remains at the forefront of the conversation as Spotify prepares for a major shift in how fans interact with music. Co CEO Gustav Söderström revealed during the Q4 2025 earnings call that the platform has already built the technology to enable AI generated remixes and covers. Söderström views these “derivatives” as an untapped revenue stream for artists to monetize their existing intellectual property.

This technological push comes at a moment of resurgence for the biggest players in the business. In 2025, according to Spotify, a long running trend was reversed:

The Shift: The combined market share of the three major record companies and Merlin grew.
The History: This marks the first time since 2017 that this cohort has gained ground over other independent entities.

High Stakes in the Catalog Market

The week concluded with news of a potential blockbuster sale for Olivier Chastan’s Iconoclast. Reports indicate the music rights vehicle is in talks for a 500 million dollar exit. With the catalog generating up to 35 million dollars in annual earnings, the deal would represent a significant valuation multiple of up to 20x. As approximately ten different parties evaluate the opportunity, the sale highlights the continued premium placed on high quality music assets.