Sir Lucian Grainge on the dilution of the majors’ music on streaming platforms, TikTok’s future and more

Speaking to experts on Universal Music Group [2,873 posts] > Universal Music Group’s revenues call recently, UMG Chairman and CEO Sir Lucian Grainge [463 posts] > Sir Lucian Grainge explained that the publicly-traded company accomplished a considerable turning point in Q3.

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The 3 months to end of September, kept in mind Grainge, significant UMG’s “5th successive quarter of strong development as a stand-alone public business”.

UMG published Q3 incomes of EUR EUR2.664 billion (USD $2.68 bn) throughout all of its departments, up 133% YoY at consistent currency, driven by development throughout all income sectors (consisting of tape-recorded music, publishing and more).

Commenting on the music business’s efficiency in the quarter, Grainge informed experts: “We are much better placed to browse the unavoidable ups and downs in income of any specific company, along with to weather the macroeconomic headwinds, adjust to modifications in formats and customer practices that we see, and to take chances in brand-new and emerging classifications.”

One such financial headwind in Q3 was a downturn in the online advertisement market, however as kept in mind by Grainge, “the slower development in the 3rd quarter in ad-supported streaming income was balanced out by development in a lot of other locations of our company, from membership to licensing, live visiting to retailing,” among other elements.

Indeed, a few of Universal’s most significant income highlights in Q3 were its incomes from membership streaming, merch and licensing.

UMG’s membership streaming incomes were up 8.7% YoY at continuous currency to EUR991 million($998 m), while merch incomes grew 1011% YoY at continuous currency to EUR189 million ($19032 m)

‘ License and other income’, on the other hand, grew 302% YoY at consistent currency to EUR306 million ($3081 m), driven, according to UMG, “by the strong healing in live touring”.

Elsewhere on the business’s incomes contact Thursday (October 27), Grainge, plus UMG’s EVP of Digital Strategy Michael Nash, and Boyd Muir, EVP, Chief Financial Officer and President of Operations, were grilled on the business’s outcomes, and other subjects, from TikTok, to the majors’ share of streams on streaming platforms.

We eavesdroped. Here are a couple of points that stuck out …


The huge volume of material published to music platforms every day is a “complicated experience” for customers …

During the call, veteran Guggenheim Securities’ expert Michael Morris asked UMG’s management to discuss whether the significant labels are “losing share of the variety of streams” on streaming platforms, most likely due to the huge volume of material being submitted every day.

Commenting on this, Sir Lucian Grainge kept in mind that “when music platforms are consuming 100,000 tracks a day, the net outcome of this is a complicated experience for everyone; customers, everybody”.

He included that [customers] are “significantly directed to low-grade material by an algorithm” which “we do not believe that’s sustainable for the platforms, nor is it sustainable for music fans.”

” We’ve sufficient information that reveals precisely why customers register to these services and it’s mainly to hear excellent music. We provide more of the super stars, timeless brochure and profession artists than anyone else.”

Sir Lucian Grainge

Earlier this month, MBW reported that roughly 100,000 fresh tracks get submitted to music streaming platforms every day.

That 100,000- track stat was shared by Sir Lucian Grainge, while attending to the Music Matters conference in Singapore on September 27, where he argued that this large volume of music, plus extra “associated material” on social platforms, is making it harder and harder for artists to break through to a considerable audience online.

Speaking on UMG’s incomes get in touch with Thursday, Grainge recommended that it is super star artists signed to significant labels like UMG, and not the large volume of DIY material, that drives usage on streaming platforms. “You simply need to take a look at the enjoyment all over the world on a fantastic album by a fantastic artist with this week’s Taylor Swift release,” he stated.

” That drives usage, it drives audience and it drives brand-new individuals to whatever to the items, to the platforms, to other music.”

” We’ve adequate information that reveals precisely why customers register to these services and it’s mainly to hear terrific music. We provide more of the super stars, traditional brochure and profession artists than any person else. While we continue to buy the future.”


” It’s our music, it’s our artists, it’s our item that is making these wheels turn.”

Commenting even more on the subject of the majors’ shares of streams versus the huge swathes of DIY and independent material offered on streaming platforms, Grainge likewise recommended that streaming platforms have the ability to maintain listeners due to the fact that of the existence of super star artists on these platforms.

Said Grainge: “When you take a look at what the retention is [on streaming platforms] and what the churn is, it’s our music, it’s our artists, it’s our item that is making these wheels turn.”

He included: “I do not believe bait and switch is a course to development for long-lasting worth development. For the a lot of part, the majority of the platforms acknowledge this and deal with us, as we’ve seen with Apple [1,020 short articles] > Apple and Spatial to enhance the whole customer experience.”

” I do not believe bait and switch is a course to development for long-lasting worth production.”

Sir Lucian Grainge

He included: “We understand we’re the very best partner for an artist with all this ‘things’ walking around. And if you wish to break through the sound and attain a long-lasting profession, we provide.”

Adding to Sir Lucian Grainge’s remarks with “a number of observations and information points”, Michael Nash [EVP, Digital Strategy], argued that “the platforms today are flooded by a tidal bore of material as countless developers getting gain access to,” arguing that, “these are basically content uploaders”.

He included: “They’re not artists in the sense that we generally consider artists.

” These are enthusiasts that are playing to a basically empty home.”


On TikTok and the video platform’s future relationship with the music market: “I have actually seen this motion picture in the past, I understand the ending.”

Guggenheim Securities’ Michael Morris likewise requested for UMG’s management to talk about report around a growth of TikTok’s service to consist of music streaming.

Morris asked particularly “whether a growth would need some sort of restored conversation with them or whether your existing relationship offers a chance for growth”.

The Wall Street Journal reported previously this month, pointing out individuals acquainted with the conversations, that TikTok moms and dad ByteDance [124 posts] > ByteDance remains in settlements with record business about broadening its devoted music-streaming platform to several brand-new markets.

Meanwhile, along with that, as kept in mind by MBW a number of weeks earlier, brand-new United States monetary information and remarks from Sir Lucian Grainge at the Music Matters conference in Singapore last month recommended that stress is installing over TikTok’s payments to the music market.

Speaking at Music Matters, Sir Lucian Grainge gotten in touch with the music market to “prevent duplicating previous errors” that had actually caused power imbalances with MTV and YouTube [1,381 short articles] > YouTube in specific.

In reaction to the concern on conversations in between UMG and TikTok particularly, Michael Nash informed experts on the incomes call recently that, “it would not be suitable for us to talk about personal settlements with any one particular partner.” He included later on that “we’re going to be striving to enhance the economics for our artists and labels progressing”.

He likewise stated: “We think that win-win collaborations are definitely possible– we’ve seen prior to where there have actually been worth spaces in the social networks area.”

” We will combat and figure out how our artists earn money and when they earn money, in the very same method that we have actually done throughout the market for several years. I have actually seen this motion picture in the past, I understand the ending.”

Sir Lucian Grainge

Adding to Nash’s point about previous “worth spaces in the social networks area”, Sir Lucian Grainge informed experts that, “I’ve seen this film prior to” and pointed out YouTube as an example of a social networks platform that has actually ended up being a substantial profits generator for the music market.

He continued: “When you take a look at where the market was where we were as a business with YouTube 10, 12, 15 years back; YouTube just recently revealed that they were paying to rightsholders $6 billion over a year-long duration. They have actually specified that they wish to be the top factor of profits to the music market by 2025.

” When you take a look at what the funnel that TikTok has, when you take a look at the billions of views, the rate at which the business has actually grown, we will combat and figure out how our artists earn money and when they make money, in the exact same method that we have actually done throughout the market for several years. I have actually seen this motion picture in the past, I understand the ending.” Music Business Worldwide

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