UMG's Sir Lucian Grainge looks ahead to further Streaming 2.0 deals and independent music partners

UMG's Sir Lucian Grainge looks ahead to further Streaming 2.0 deals and independent music partners

Universal Music Group CEO & chairman Sir Lucian Grainge has issued his annual New Year’s message to staff reflecting on the major’s achievements and the plans for the year ahead (a little later than usual because of the wildfires in LA).

It follows a record haul of trophies for UMG artists and songwriters at the Grammys, including Kendrick Lamar, Sabrina Carpenter, Chappell Roan, Kacey Musgraves and Samara Joy.

In his message, Sir Lucian Grainge highlighted the breakthrough of superstars Sabrina Carpenter and Chappell Roan in 2024. 

“Our company’s fundamental building block is artist development and in 2024, investment in new talent continued to produce spectacular results around the world,” wrote Sir Lucian.

Among its many achievements, the major had four of the Top 5 artists globally on Spotify with Taylor Swift (No.1), The Weeknd, Drake and Billie Eilish.

UMG put in place major label structures, including big changes in the US and UK, which Sir Lucian said has resulted in the company “operating with greater agility and efficiency”. UMG had its best US performance in six years, according to Luminate data.

In the memo, Sir Lucian reflects on developments in 2024 including the strategy for ‘responsible AI’ and expanding industry partnerships particularly in artist services.

Following UMG’s acquisition of PIAS, co-founder and CEO Kenny Gates spoke exclusively to Music Week about the benefits of that partnership – and why major labels can be supportive of the independent sector. 

It’s a sentiment that Sir Lucian clearly shares, as he outlines in the memo to staff: “The reason so many independent music entrepreneurs actively seek to partner with UMG when they have more alternatives than ever before is that we provide what they’re seeking: the most innovative creatives and finest resources that will advance the careers of their artists and achieve their financial goals within a culture that respects artists and their music. After all, 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.  

“For us, music is a vital – perhaps the vital – art form.  Artists and the music they create are our lifeblood.  We’re proud both to invest in businesses that can and do support today’s leading music entrepreneurs and to advocate for the policies and practices that are designed to protect and grow the entire music ecosystem.”

Universal Music has also agreed a deal to acquire Downtown Music, through its Virgin Music subsidiary.

In addition to listening to their favourite artists’ music, fans want to build deeper connections to artists they love

Sir Lucian Grainge

Looking ahead to 2025, the UMG boss is ready to build on the ‘Streaming 2.0’ deals already announced in recent weeks with Amazon Music and Spotify. The initiative was outlined last autumn at the Capital Markets Day presentation.

“In 2025, we’ll also be reaching out in new ways to engage fans,” wrote Sir Lucian in his memo, while anticipating “similar agreements with other major platforms” in the months ahead.

Expanding on UMG’s Streaming 2.0 strategy, he added: “In addition to listening to their favourite artists’ music, fans want to build deeper connections to artists they love. Last year, in accelerating our direct-to-consumer and superfan strategy, we formed a strategic partnership and became an investor in NTWRK and Complex to build a premium live-video shopping platform for superfan culture. 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. Some of this will be done through our current partners and some through our own D2C channels, which we will continue scaling to meet the massive appetite of fans. 

“After years of working to aggressively build a healthy commercial environment for artists and music – one in which we have reached approximately 670 million subscribers – we will be laser-focused in 2025 on continuing to expand the ecosystem and improve its monetisation.”

UMG will continue to aggressively increase its presence in high potential markets through organic A&R, artist and label services agreements and M&A, according to the memo.

As he concluded, Sir Lucian reminded the UMG global workforce that “no other form of creative expression is more fundamental to human existence than music. By that, of course, I mean real music created by human artists.”  

He added: “Some will try to disrupt our business or criticise us. That we know. It comes with being in the most competitive market that music and music-based entertainment has ever seen, and it comes with being the industry’s leader and primary driving force. But our vision and our ability to consistently execute gives us the momentum to continue to succeed and grow.”

 

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