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Universal boss Lucian Grainge talks charity, choice and change – but avoids #fixstreaming – in company wide memo

By | Published on Thursday 13 January 2022

Lucian Grainge

Universal Music boss Lucian Grainge has sent out a start-of-the-year memo to the major’s workforce, bigging up charity, choice and change, plus – you know – mega-hits and big bucks. What a time to be alive!

One thing the memo doesn’t directly address, though, is the growing controversy within the artist community about the dominance of the majors, and the widely held belief among that community that the streaming boom is mainly benefiting the corporate end of the music industry – Universal and Grainge especially – rather than the actual music-makers.

Of course, this is a memo to the major’s staff, so you wouldn’t necessarily expect that topic to be addressed. Plus, to date, Universal Music has very much given the impression that its strategy for dealing with the #brokenrecord and #fixstreaming campaigns is one of distraction and denial, backed up by the confident belief that once those pesky artists start touring again they’ll all shut up about the digital pie.

That said, perhaps aware that at least some of his workforce are tiring of being repeatedly portrayed as the bad guys during the whole economics of streaming debate – especially in the UK – there were a few indirect statements in the memo that together form some sort of response to the criticism the company has been facing in the last year or so.

However, before all that, Grainge first provides the obligatory pandemic chat and then talks through the various charitable initiatives that his company and its workforce have been involved in over the last year, some COVID related, some focused on fighting prejudice or tackling climate change, and some supporting disadvantage communities. Oh yes, and there was that one-off donation of £123 million to CEOs In Need. Though weirdly he doesn’t mention that.

Then he talks through all the mega-hits, the streaming stats, the chart achievements, the awards and the accolades secured by the artists and songwriters signed to Universal, and the records it’s released and the songs it’s published. Plus there’s a section name-checking some of the key promotions that have occurred within the business over the last twelve months.

But elsewhere there are comments linked to the “majors aren’t evil, honest” narrative that the company’s lobbyists continue to push in political circles.

Basically, recorded music is booming because Universal and its leadership embraced change and championed innovation. Artists have more choice than ever when picking business partners to work with on their releases. But artists still pick Universal because in such a crowded market-place you need the geniuses who work at the major on your team. Oh, and royalty payments to artists and songwriters are at record highs!

“I’ve experienced many transformational shifts over the course of my career”, Grainge notes, “changes in format from vinyl to cassette to CD; partnering with Apple on downloading; championing the launch of Spotify’s streaming service; forging the industry’s first partnership with Facebook to open social media. Change is a constant. Yet, through all these twists and turns, by adapting our business models, promoting competition, and creating a healthier ecosystem for music and artists, we never resisted change, we embraced it. And we’ve always come out stronger”.

“Artists today have more opportunities and choices than ever before in terms of how they release their music and with whom they partner to develop their careers”, he adds. “At the same time, it’s harder than ever for artists to break through the noise: 60,000 songs are added to Spotify every day. Yet, this past year, our results demonstrated once again that partnering with UMG dramatically increases the odds for artists in countries around the world to break through and also achieve global success”.

“In country after country”, he also muses, “we are seeing record royalty outflows to recording artists and songwriters. In fact, UMG’s investment in artists has never been higher. And that’s critical, because for us, music – something to which we have all dedicated our lives – is the most vital form of creative human expression, an art and a gift to be cherished and nurtured”. Lovely stuff.

A lot of that is technically true, of course. There are plenty of good reasons for artists to work with Universal on their new recordings and songs in a business that is increasingly crowded, competitive, global and complex. And an injection of cash flow – and access to marketing, infrastructure and networks – remains vital for most new artist businesses.

Though critics and cynics in the artist community might argue that – while the majors truly embracing streaming in the last decade very much sparked a revival of the record industry’s fortunes – it was series of terrible decisions made by major label leaders in the early 2000s that tanked the recorded music business to start with.

And maybe Universal’s main achievement during the first phase of the digital revolution was buying up a load of catalogue when the industry was at its lowest ebb, and then waiting for Daniel Ek to come up with a cash cow business model to monetise that catalogue. Much of which, of course, is linked to old record contracts that pay out shitty royalties to artists.

But it’s 2022, what’s the point in dwelling on the past? And while the major’s senior execs and shareholders might have benefited more than most from all that good fortune, as a traditional music company Universal Music does still pump a decent portion of its winnings into signing and developing artists. Which is still a good and solid basic model for supporting new talent.

Though those critics and cynics might argue that heritage artists are still being well and truly screwed over, and – unlike its main rival Sony Music – Universal is yet to make any gestures at all really to deal with that fact.

Plus, it’s still true that with each new music revenue stream that emerges, the majors unilaterally decide how that income should be structured and shared, without consulting on or even communicating those decisions to the artist and songwriter community, and consistently doing so in a self-serving fashion.

And that remains a problem because, as Grainge admits towards the end of his memo, the next decade is likely to see even more new revenue streams take off than the last.

“Earlier I mentioned that change in our industry has been a constant”, he goes on. “That’s probably more true today than it’s ever been. I believe we’re at the very beginning of a new wave of growth”.

“When I think about the addressable market for music, I see so many opportunities in categories we are only just beginning to monetise”, he says, before listing “social media, fitness, physical and mental health, gaming, smart audio devices, the connected car”, and adding: “Some of these already contributing meaningful revenue, all with enormous potential”.

So that’s exciting isn’t it? All hail 2022. More change. More choice. More mega-hits and big bucks. And more charity too, I’m sure. But, no doubt, plenty more controversy about the dominance of the majors, and the extent to which Universal and Grainge benefit from the current and future digital boom when compared to the music-makers of the world.