It’s that time of the year again when the music industry swirls the tea leaves of Universal Music Group boss Sir Lucian Grainge’s annual new year’s message to staff, in order to predict the fortunes of his company in the year ahead.
The email was sent out yesterday (3 February) and as usual, there are some news lines alongside the obligatory celebration of UMG artists’ and songwriters achievements over the last year. One of those news lines concerns UMG’s business in sub-Saharan Africa, following its investment in Afrobeats label Mavin Global.
“Founders Don Jazzy and Tega Oghenejobo continue to lead that company as well as, going forward, all of UMG’s business in Nigeria,” wrote Grainge. UMG announced plans to buy a majority stake in Mavin last February, with regulatory approval following later in the year.
That deal came shortly after Mavin announced that it had reached the milestone of 6bn global streams of its artists’ music, led by Rema’s ‘Calm Down’, which has since passed the milestone of 2bn Spotify streams across its original version and a remix with Selena Gomez.
In its Global Music Report last year, the IFPI reported that Nigeria’s recorded-music market grew by 44.6% in 2023 – “the highest single market growth rate globally” that year, although with $8.9m of revenue, it was only 57th in the global rankings.
In his letter, Grainge also said that UMG is continuing to focus heavily on “responsible AI” in its partnerships with startups and lobbying of policymakers.
He cited SoundLabs, ProRata and Klay as three startups whose cut of their jib UMG likes, while promising more “commitment to the enactment of Responsible AI public policies, fighting back against so-called text and data mining copyright exceptions and other misguided and ill-intentioned proposals that would enable what I will euphemistically call the unauthorized exploitation of creators’ work”.
Grainge also issued his latest broadsides against some of UMG’s rivals – both for buying music catalogues and working with independent artists.
“We’re not a financial institution that views music as an ‘asset.’ And we’re not an aggregator that views music as ‘content.’ We are a music company built by visionary music entrepreneurs,” he wrote, before offering thoughts on the landscape of digital services.
“The leadership posture among our DSP partners has undergone some significant changes. For example, one of our fastest-growing subscription partners, YouTube, is also one of the most recently launched,” he wrote.
“We expect more inevitable jockeying for the leadership position among standalone platforms as well as among the music services that are divisions of trillion-dollar valuation tech companies.”
While describing UMG as “a relative minnow in comparison to a trillion-dollar tech company” Grainge said his firm will continue to push DSPs on its desired ‘artist-centric’ changes in 2025, including fraud.
“We’re setting forth the best practices that every responsible platform, distributor and aggregator should adopt: content filtering; checks for infringement across streaming and social platforms; penalty systems for repeat infringers; chain-of-custody certification and name-and-likeness verification,” he said.
That’s an interesting insight into what UMG is pushing for behind the scenes – even for companies (distributors for example) who it has no commercial relationship with.
Finally, Grainge suggested that UMG’s superfans strategy this year will lean in to physical products.
“This year will see us expanding our product offerings to fans, as we continue to redefine the ‘merch’ category and create superfan collectibles and experiences,” he wrote. “Some of this will be done through our current partners and some through our own D2C channels.”
