Hollywood's top music label is struggling to grow in the ultra-competitive streaming market.

Shares of Netherlands-based Universal Music Group (UMG.AS), which represents A-list artists like Taylor Swift, Drake, Justin Bieber, and Adele, dropped 20% shortly after the opening bell on Thursday. The sharp decline came after the company unveiled sluggish results for its streaming and subscription businesses.

The stock is currently on track for its biggest one-day loss ever.

The company's second-quarter subscription revenue slowed to 6.9% growth year over year, excluding foreign exchange (FX). That's down from 12.5% in the first quarter—and a miss compared to Bloomberg consensus estimates of 11% growth.

Streaming revenue, meanwhile, decreased 3.9% ex-FX in the second quarter, a significant reversal from the 10.3% growth it recorded in Q1. The company blamed the decrease on "a deceleration in growth at key advertising-based platform partners as well as shortfalls on certain platforms related to the timing of deal renewals."

Deals with social media platforms, a popular option for music distribution, have become more of a headache for the company in recent months.

In May, UMG ended its partnership with Meta Platforms (META), which was licensing premium music videos for Facebook. Management said that the product offering "was less popular with Facebook's user base than other music products."

UMG also revealed it lost a month's worth of revenue amid its high-profile battle with TikTok over a new licensing agreement, which the pair eventually resolved.

Citi analyst Thomas Singlehurst, who downgraded shares to Neutral from Buy, said although the volatility "may prove to be temporary," he expects "disappointment to weigh on sentiment" in the near term.

On the earnings call, UMG vice president and CFO Boyd Muir said the year over year deceleration in subscription growth was "partially due to the timing of price increases" from its partners.

UMG's partners include audio streaming giants like Spotify (SPOT), Amazon Music (AMZN) and Apple Music (AAPL) — all of which have raised prices in recent years, which has helped UMG bring in additional revenue for its subscription business.

"The other factor impacting our subscription revenue growth this quarter is the slowdown in subscriber growth at certain platforms, which is occurring while the overall subscription marketplace continues to experience significant growth in subscribers globally," Muir added."While Spotify, YouTube and many regional and local platforms have continued to exhibit healthy growth in subscribers, other large partners who have been less successful in driving global adoption have seen a slowdown in new subscriber additions."

The executive did not specifically call out which platforms were seeing a downtick in subscribers, but did say the company is "engaged with all of our key partners" in dialogue regarding product innovation.

He highlighted Spotify's comments from Tuesday around its yet-to-be announced "super premium" offering, which Spotify said "consumers are really asking us to do."

Muir backed Spotify's thesis, adding, "Our research and analysis indicate that as many as 20% of the current subscriber base could upgrade to a super-premium tier at a meaningfully higher price point for a compelling product configuration, one which offers enhanced features and exclusive access to content."

Despite the disappointments, the company still saw strong growth in divisions like merchandising revenue, which jumped 44% in Q2 thanks to artists like Taylor Swift. Other top sellers for the first half of 2024 included Morgan Wallen, Noah Kahan, Billie Eilish and Ariana Grande.

Total revenue rose for the twelfth consecutive quarter to 2.93 billion euros ($3.18 billion), representing roughly 9% year over year growth—and ahead of consensus estimates. Adjusted EBITDA increased more than 11% from the prior-year period (excluding foreign exchange) to 649 million euros, or $705 million.

Earlier this year, UMG launched a restructuring plan in an effort to generate 250 million euros in annual savings by 2026, which included job cuts.

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].

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