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They’re Not ‘Major Labels.’
The world's largest music companies are treating merchandise and live event revenue as increasingly essential business drivers rather than peripheral activities. Sony's combined income from merchandise, ticketing, and live events climbed from $447 million in 2020 to over $2 billion by 2025, whilst Universal Music Group reported $2.5 billion from the same combined categories—exceeding its total physical music and ad-funded streaming revenues. Both companies have been deliberate in building these divisions through acquisitions and strategic partnerships around major touring campaigns.
The pace of this shift underscores a fundamental reorientation of major label priorities. Sony Music Japan's live and merchandise revenues expanded at an annual rate of 22.8 per cent across five years, substantially outpacing recorded music growth of 5.8 per cent. Universal's merchandise sales have tripled since 2020, and its licensing and concert revenues have roughly doubled in the same window. With traditional sync licensing revenues stagnating industry-wide, these alternative income streams have become vital to corporate performance.
In short
- Major music companies have dramatically expanded merchandise and live event operations, now generating $2–2.5 billion annually
- These revenue streams have grown 3–7x faster than recorded music, now rivalling physical sales and ad-funded streaming combined
- Strategic acquisitions and high-profile artist partnerships (e.g. Bad Bunny tours, Ceremony of Roses deal) are driving expansion
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The recorded music industry's traditional model collapsed with streaming, making these alternative revenue streams not a choice but a necessity for survival. Labels investing in touring infrastructure and merchandise actually benefit artists—particularly emerging ones—who lack the capital to develop these businesses independently. Live events and merchandise are legitimate value-creation activities that fans genuinely want; there is nothing extractive about providing concerts or products that consumers willingly purchase.
The case against
This reorientation risks transforming music labels from stewards of artistic creation into tour and merchandise operators, fundamentally compromising their historical role in supporting the recording and promotion of music itself. The shift creates perverse incentives where labels may neglect less commercially viable artists or push creators toward touring over studio work, potentially diminishing the diversity and experimental character of recorded music. Furthermore, it enables layered extractive pricing across multiple revenue channels—tickets, merchandise, and recorded music—concentrating wealth extraction rather than supporting genuine artistic expression and discovery.
Explained simply
The world's largest record labels are fundamentally reshaping their business models. Where they once primarily made money from selling recorded music, companies like Sony and Universal are now treating merchandise sales, ticket operations and live events as core business drivers that can match or exceed their traditional music revenue.
This shift reflects years of deliberate investment. Sony's combined income from merchandise, ticketing and live events grew from $447 million in 2020 to over $2 billion by 2025, whilst Universal earned approximately $2.5 billion from those same combined categories—more than it generates from physical music and ad-supported streaming combined. Both companies have built these divisions through acquisitions and partnerships tied to major touring campaigns.
The transformation underscores changing economics across the industry. Revenues from recorded music have grown modestly, whilst income from traditional licensing has stagnated. By contrast, merchandise and live event revenues are expanding at much faster rates, making these income streams increasingly important to company finances.