universal music group
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The largest publicly traded music companies gained this week as investors digested the impacts of another increase in the Federal Reserve’s benchmark interest rate.
Billboard‘s Global Music Index rose 2.1% this week to 1,213.30 despite 11 of its 20 stocks being in negative territory. Shares of Universal Music Group, the most valuable component of the 20-stock Index, rose 6.7% to 22.82 euros ($24.58). K-pop company HYBE rose 4.5% to 187,500 won ($144.70), Warner Music Group improved 4.3% to $31.50, SiriusXM rose 3.6% to $3.77 and Spotify was up 1% to $128.30.
The Index’s greatest gainer was streaming company LiveOne, which climbed 13.1% to $1.12. On Tuesday, LiveOne said it is extending the record date for the previously announced spinoff of its PodcastOne subsidiary to April 7. “We expect the special dividend and trading of PodcastOne to begin in April,” said Robert Ellin, LiveOne CEO and chairman. The company also announced it gained 136,000 paid subscribers since Jan. 1, to more than 2 million monthly paying members, and plans to reach 2.75 million subscribers by the end of the year.
Broadcast radio company Audacy, a relatively small component of the Index, had the week’s biggest decline of 21.4%. On March 16, a B. Riley analyst cut the price target for Audacy shares from 50 cents to 10 cents. The stock closed at 11 cents per share on Friday and is down 52% year to date.
The U.S. Federal Reserve Bank raised its benchmark interest rate a quarter of a percentage point on Wednesday — from 4.75% to 5% — and suggested additional hikes may not be needed “to return inflation to 2% over time,” the Federal Open Market Committee said in a statement. That decision sent markets into negative territory on Wednesday: both the Dow Jones Industrial Average and Nasdaq composite fell 1.6% while the S&P 500 dropped 1.7%. But stocks rallied on Thursday and Friday. The Dow finished the week up 1.2% while the Nasdaq composite and S&P 500 rose 1.7% and 1.4%, respectively.
French streaming service Deezer and Universal Music Group announced this month that they are partnering to develop and test new potential payment models that would more fairly reward artists, similar to a partnership UMG launched in January with Tidal.
While the streaming services and labels are still a long way off from implementing new streaming royalty payment models, Deezer’s chief executive Jeronimo Folgueira spoke with Billboard about some of the ideas being explored and the economic imperatives that are driving his company to push for a new way to pay rights holders.
Deezer has long advocated for changing payment systems. How have the company’s views evolved?
We were, I believe, the first to really embrace the concept of user-centric, which means that the artist gets a share of the payments that the user that listens to them pays, instead of a global pool. We could never do it unilaterally [because] we have not been able to get the majority of labels to agree to an initiative so far. To do it right, you really need a consensus from the industry and obviously, there are so many players involved that it’s difficult to get that. I do believe [an artist-centric] system is much better than the current system we have, but no system is absolutely perfect. There were some flaws, and that’s why there was so far resistance from some labels. I believe that there are a lot of elements in the artist-centric initiative that Universal is pursuing that make sense and could make something like [user-centric payment systems] even better.
You often mention the importance of “growing the pie.” What do you mean?
When the discussion is about sharing the same pie there are always winners and losers and it’s very difficult to get consensus. That’s why if you focus on growing the pie then you can have a discussion also about the distribution of that pie because some will win and some will win double. One of the things that I’m really excited about in this discussion is … also figuring out ways of monetizing fandom better. If we can find ways to increase the [average revenue per user] on the way, that would be a win for the artist, for the labels and for the platforms like us.
How does that fit into Deezer’s overall growth strategy?
Basically, today 100% of our revenues come from selling access to the catalog. So you pay $10.99 and you get access to the full catalog. But we don’t let users pay for anything else on the platform. We know that we have a lot of fans of artists on Deezer but we cannot monetize them in any other way. And the artist is struggling to monetize them in other ways because they don’t have direct access to the fans. We believe that working together with the label and the artists to figure out ways of helping the artist directly access their fanbase and monetize that fandom would benefit us and them as well.
What’s in it for you?
If we only change the compensation model there is nothing in it for Deezer except that we will be a platform where artists are remunerated better. It will give us a bit of differentiation but economically it will not really change anything.
If we find ways of monetizing better, let’s say, if we would allow fans to subscribe directly to artists, we would have an additional revenue source that we would share with labels and the artists, which will improve our growth and profitability profile. It is important to be more fair in terms of payout but to have a financial impact, we also care a lot about growing the pie. I fully share [Warner Music Group CEO Robert Kyncl‘s] view. Music is extremely undervalued. We are very keen on working with Universal, but we are also keen on working with all the other labels like Warner, Sony, Believe and all the indies to make the industry better by monetizing better and then sharing that pie in more fair ways.
Do you have to “grow the pie” in order to pay artists more?
There’s not enough money right now for us all. First of all, music is undervalued. We’re giving too much for too little. Second, with the current monetization model, there is really not enough money for everyone. The platforms like Deezer or Spotify, we’re not making enough profits. And many artists are struggling to make a living. So for the system to be viable we need to grow the pie. That has to be the number one focus.
At the risk of asking a naïve question, what if the share of the pie that has historically gone to the labels shrank? Is that just impossible?
So basically the artists get more, and the DSPs get more and the labels get less? The thing is that it is a fragile ecosystem with a lot of negotiation power in the hands of the labels. You [the DSPs] do need a full catalog. The labels are not going to hand their money to us or to the artists. Instead of having that fight — which is what we’ve been doing basically for the last 10 years — it is a far healthier discussion to be had working together to grow the pie especially because music now is extremely undervalued. The piracy days are long gone. This is the right time to have the discussion. One of the things that doesn’t help is that a lot of the distribution is in the hands of companies that don’t have music as a core business.
Who are you referring to?
I’m talking to the tech giants. Three key players here are tech giants, and their core business is not really music. Then you have two independents, one that is very big — Spotify — and then Deezer. We are truly music; it is our duty and necessity to work together with the labels to make the whole ecosystem better and bring the value of the music to where it should be.
Where does the initiative with UMG currently stand?
There is nothing that we are testing yet, and we don’t have a deadline. But we are starting to work on different models of compensation that we could eventually test that would solve a lot of the issues we see today.
During a recent earnings call, Universal Music Group chairman and CEO Lucian Grainge said he wanted a new model where “artists are rewarded for the fans they bring in [to subscribe to streaming services] and the engagement they drive [on those platforms].” How can you determine which artists drive subscriptions?
That is very difficult to know and quantify. This is one of the areas where we are working with Universal to figure out if there is a way to measure, quantify it and use it for payment or not. That’s part of the exercise. That is one of the most tricky ones. There are other areas [such as] if a user goes and searches for an artist and song, that has more value than if they just go and listen to that stream in a lean-back experience. A stream that is heard as part of a playlist is not as valuable as when you go proactively to a platform, look for a song and play that song. You as a fan care about that song more. We agree with that as a concept but the question is how do you apply that in a model that is easy to implement and explain? There needs to be transparency [so] everyone understands how things get calculated and how people get remunerated. It’s easier said than done. This is why we need to work with Universal but also with other labels to do that exercise. First, we have to agree with the principles. And then you have to find a pragmatic way of actually doing it.
Could you walk me through the different models you are exploring?
I cannot go into that level of detail right now because we are in a very exploratory phrase. We are looking at what is feasible, what impact does it have and, based on that, we will have a proposal to test. But it’s too early to explain these models.
Have you seen any examples of streaming services that have done a good job of encouraging active fan experience?
Video and music are very different so you cannot really draw comparisons between the two. I don’t think anybody has cracked it, and that’s why Universal is working with us. We would love to be the first ones to figure out the new model that makes sense. SoundCloud made an announcement with Warner Music around user-centric, but they haven’t disclosed anything. Since they are a private company, we do not know how that has worked or played out.
Where are the majority of Deezer’s users based? Could the results of the Deezer and UMG experiment be applied on a global scale, or would differences in listening behavior in different markets limit the wider applicability of the study?
We are a global company with a presence in 180 countries. We have a large user base in France — less than half of our subscribers — then we have a lot of subscribers … in Brazil and then a bit everywhere else. Our model will have a big impact on the French market because there we are a massive player, but the learnings can be applicable anywhere in the world.
However, Lucian has mentioned that he sees different models for different platforms at different stages of their development in different countries. I think there is some merit in that. Our Brazilian business is very different from our French business and American business. You might need different models as you go through different stages in a market. Right now, it’s one model that came up really quickly, built 15 years ago on the back of piracy, and that model fits all. I think in the future we need more flexibility.
Is there anything I didn’t ask that you wanted to highlight?
Something that is really important is that we are working really closely with UMG because they are the largest label in the world. And they are a very important player and you cannot change the system without having Universal on board. I’m really excited that Lucian is leading this discussion and trying to make the industry better for everyone.
But I want to make sure it is well understood, as well, that this should benefit all real artists, whether they are from Universal, any other label or independent. We want to reward real artists that create real music. This is not to benefit Universal alone in any way. This is not a Universal-centric payments system. We’re working together to make the industry better for everyone who creates high-quality content.
You said a better system will reward “real artists” and “high-quality content.” What is the opposite of that? And should it not be rewarded in this new system?
There is a whole discussion on what are we going to do when machine-generated music comes because it is going to happen. There is not that much yet, but I think it’s a matter of months before we start getting flooded by machine-generated content, and we need to think about how we’re going to handle it. The other thing is it’s not the same that an artist creates new music and creates a fan — is a real artist in a way — compared to, for example, people that do a cover…. Those streams are not as valuable to us as the original song from the original band. The same thing with sounds that get uploaded, for example, the sound of the washing machine for people who need that to sleep. The sound of rain is not as valuable as a proper album created by an artist recorded in a studio. The fact that the recording of rain gets more streams than Lady Gaga, I find that astounding. We have to do something about it. It is hurting the user experience. We cannot flood the catalog with poor-quality stuff.
What should be done, and is this part of artist-centric royalties or another initiative?
We are trying to address that problem as part of the artist-centric discussion. We believe there are things we can do with the artist-centric model that will create the right incentives and will solve part of that problem. Yes, there are other areas where we might be stricter about the rules of what can be uploaded to the platform or not. We will explore all the different options. Obviously taking a big part of the economic incentive [away] is a big part of the job.
Universal Music Group, the country’s biggest record label, has recently taken steps to rein in the costs of radio campaigns, multiple sources tell Billboard. The move comes at a time when there is debate around the music industry about the most effective methods of spending marketing dollars and promoting a record, and traditional outlets — airplay, late-night television appearances, and even prominent playlisting on streaming services — don’t always drive engagement.
As many radio formats focused on new music are struggling, more label executives say it’s an open question whether paying big money for airplay is worth it. “The math is just not working,” according to one major label promotions executive outside of the UMG system.
Record companies have long supplemented their in-house radio departments with help from contractors, known as independent promoters. Working multiple songs in multiple formats across hundreds of stations around the country requires a lot of staff and local relationships. Indie promoters often cultivate those relationships with specific stations by region or format. Some operate on a retainer basis, charging a set amount for the duration of a promotional campaign. Others charge for each add they obtain for a song on station playlists, with costs ranging from a few hundred dollars to several thousand.
When it comes to the latter model, the world’s leading record company wants to limit the cost of adds, according to four veteran promotions executives. A rep for UMG declined to comment.
“It’s common knowledge Universal has drawn back” from spending as much on radio promotion, says Joey Carvello, a veteran who previously worked in-house for major labels and as an independent. “It’s a hot topic,” adds Daniel Glass, founder of Glassnote Records, who notes that Universal’s new approach was “being spoken about everywhere” at an industry event earlier this year in Los Angeles.
Major labels have attempted to limit the cost of radio campaigns multiple times over the years. More than four decades ago, Billboard’s Nov. 8, 1980 issue reported that labels in the Warner Music Group system were looking to “realize as much as $3 [million] to $6 million a year in savings by dropping their outside promotion help.” Today, a label aiming to get to the top of the mainstream R&B/hip-hop airplay chart is going to need to budget more than $100,000, executives say; in some cases, a pop campaign can cost over $300,000.
Past efforts by the majors to curb promotion costs were often undone by the necessity of radio exposure. The key difference nowadays is streaming’s ability to mint major artists with little or no radio play. Take 23-year-old rapper Youngboy Never Broke Again: Only Drake and Taylor Swift earned more streams in 2022, according to Luminate, but Youngboy has only ever cracked Billboard‘s all-genre Radio Songs chart once — as a featured act.
Streaming now accounts for 84% of U.S. music industry revenues, according to the RIAA’s 2022 year-end report. And it’s not always clear, even to the people in radio, that airplay drives more streams.
A 2021 report by the market research company MusicWatch found that streaming and listening on social media accounted for 46% of survey respondents’ weekly listening, while AM/FM radio accounted for 16%. A survey by MIDiA Research last year found that YouTube was the leading source of music discovery. And for the all-important Gen Z, TikTok was in second place.
MusicWatch’s study also indicated that streaming dominated lean-in listening — YouTube, Spotify, Apple Music, and Amazon Music accounted for 56% of this activity, as compared to 13% for broadcast radio. That’s important because lean-in listeners are likely to be more active fans, who might be inclined to buy tickets or vinyl or sweatshirts from an artist they love.
In this environment, a major-label radio promotion executive complained last year that the cost of airplay may not make economic sense. He recalls needing to spend $3,000 to get a song into rotation in a small city. That airplay would need to drive around a million streams in that area alone “to justify that expense,” he said. The city’s population was less than 150,000 people.
Of course, not everyone in the music industry feels the same. “At the end of the day, radio makes pop stars,” Carvello says. And Midia’s survey found that, outside of Gen Z, radio was the number two source of music discovery after YouTube.
Glassnote — the independent label home to Phoenix and Mumford & Sons — has no plans to change its radio strategy, according to Glass: “Independent promotion has been very important to the growth of Glassnote over the years. We’re not going to change our loyalty.”
Universal Music Group has acquired the British indie classical label Hyperion Records, the company announced Wednesday (March 15).
The 43-year-old label — which is home to artists like Marc-André Hamelin, Angela Hewitt and Stephen Osborne and represents a catalog of 2,5000 recordings, some of which date back to the 12th century — will operate as a standalone label within Universal Music U.K. alongside Decca Classics. Terms of the deal were not disclosed.
Hyperion will now join Decca Classics and Deutsche Grammophon in UMG’s classical portfolio, while Simon Perry — who has overseen the label for more than 20 years, after taking over from his father, Hyperion founder Ted Perry — will remain as managing director.
“I’m thrilled to bring Hyperion to Universal Music Group, a company that shares Hyperion’s commitment to bringing the most distinctive and brilliant musicians to as wide a public as possible,” Perry said in a statement. “By being part of UMG, while keeping our artists and staff together, we can continue to build on my father’s legacy and that of everyone who’s been part of the Hyperion family over the past 43 years. My debt to all of them is huge and I look forward to leading this incredible label into an exciting new chapter.”
Hyperion is next set to release Vaughan Williams’ Sinfonia Antartica and Symphony No.9 with BBC Symphony Orchestra, a series it says is dedicated to the Masses and Magnificats of Cristóbal de Morales, as well as recordings from the London Haydn Quartet and Stephen Layton and the Choir of Trinity College, Cambridge, among others. In a statement, UMG president/CEO of global classics and jazz Dickon Stainer called Hyperion “a jewel of a label,” adding that “we are committed to continuing the magnificent work done by the Perry family and to preserving and building on the special place Hyperion occupies in the hearts of artists and music fans alike.”
The acquisition comes amid a veritable wave of news spilling from the world of classical music lately. In November, Deutsche Grammophon launched a new standalone streaming service, Stage+, catering to its own catalog and that of Decca Classics. And earlier this month, Apple Music announced its own standalone streaming app, Apple Music Classical, which will roll out later this month and stems from its August 2021 acquisition of Primephonic.
“We are enormously proud that Hyperion has joined Universal’s family of classical labels to sit alongside Decca Classics in London,” Decca Label Group co-presidents Tom Lewis and Laura Monks said in a statement. “Simon and his father have created a very important recorded classical catalogue that serves a dedicated global audience. And the label continues to work with artists who are the best of the best. We are determined to celebrate the label’s legacy and continue its extraordinary story.”
Universal Music Group’s revenues surged 21.6% to 10.34 billion euros ($10.96 billion) for all of 2022, boosted by strong returns from recorded music subscriptions and streaming.
The world’s biggest music company reported the revenue its recorded music division gets from subscriptions and streaming rose by nearly 19% to over 5.3 billion euros ($5.6 billion), while digital revenues in its music publishing division rose by nearly 50% to over 1 billion euros ($1.05 billion) in 2022, all helping it achieve a nearly 15% uptick in operating profit.
UMG chairman and chief executive Lucian Grainge said the earnings were evidence the company’s diversified revenue streams has made it an example of the music business’ steady strength amid a darkening economic outlook.
“We continue to successfully manage the company for long term growth while driving strong results in our core business — developing great artists and introducing their music to fans around the world,” said Grainge. “Our roster … achieved enormous commercial and creative success in markets around the world. We also worked to evolve and expand relationships with our existing DSP partners as well as establish new ones in fitness, health, gaming and the metaverse, driving the industry forward though leadership, creativity, innovation and collaboration.”
UMG was home to seven of the top 10 albums on the Billboard 200, 15 of the International Federation of the Phonographic Industry’s (IFPI) top 20 global artists and four of Spotify’s top five global artists in 2022.
UMG reported adjusted earnings before interest, taxes, depreciation and amortization rose 19.4% to 2.14 million euros ($2.26 billion) for 2022 from a year ago. Adjusted EBIDTA margin fell by 0.4 percentage points to 20.6%.
The company’s free cash flow increased by a whopping 70.2% to 638 million euros ($675 million) largely from the growth in adjusted EBITDA, according to the company’s filings.
UMG’s Earnings Highlights:
Revenue rose 21.6%, or 13.6% in constant currency, to 10.34 billion euros ($10.96 billion) for 2022 from 8.5 billion euros ($9 billion) in 2021
EBIDTA rose 20.3%, or 12.5% in constant currency, to 2.03 billion euros ($2.15 billion) in 2022 from 1.69 billion euros ($1.78 billion) in 2021
EBITDA margin fell to 19.6% in 2022 from 19.8% in 2021
Adjusted EBITDA rose 19.4%, or 11.7% in constant currency, to 2.14 billion euros ($2.26 billion) in 2022 from 1.79 billion euros ($1.93 billion) in 2021
Operating profit rose 14.8%, or 7.9% in constant currency, to 1.6 billion euros ($1.69 billion) in 2022 from 1.39 billion euros ($1.48 billion) in 2021
Net debt fell 10% to 1.8 billion euros ($1.9 billion) in 2022 from 2 billion euros ($2.1 billion) in 2021
Free cash flow rose 70.2% to 1.09 billion euros ($1.15 billion) in 2022 from 638 million euros ($675 million) in 2021
Recorded Music Division Highlights:
Recorded music revenue overall rose 16.3%, or 8.8% in constant currency, to 7.9 billion euros in 2022 from 6.8 billion in 2021
Subscriptions and streaming revenue rose 18.7%, or 9.8% in constant currency, to 5.3 billion euros in 2022 from 4.5 billion euros in 2021
Physical revenues rose 7.7%, or 4.1% in constant currency, to 1.2 billion euros in 2022 from 1.12 billion in 2021
License and other revenue rose 19.6%, or 13.4% in constant currency, to 1 billion euros in 2022 from 896 million in 2021
Downloads and other digital revenue rose 4%, or fell 2.9% in constant currency, to 337 million euros in 2022 compared to 324 million in 2021
Music Publishing Highlights:
Music publishing revenues overall rose 34.8%, 26.3% in constant currency, to 1.8 billion euros in 2022 from 1.3 billion euros in 2021
Performance revenues rose 24.9%, or 18.2% in constant currency, to 371 million euros in 2022 from 297 million euros in 2021
Synchronization revenues rose 18.6%, or 10.3% in constant currency, to 236 million euros in 2022 from 199 million euros in 2021
Digital revenues rose 49%, or 38.7% in constant currency, to 1.04 billion euros in 2022 from 698 million euros in 2021
Staff at Motown Records were hit with news of layoffs Thursday (Feb. 16) as the label gets reintegrated under the Capitol Music Group (CMG) umbrella, multiple sources tell Billboard. The number of people and departments affected are unknown as of press time.
A spokesperson for Motown Records confirmed the layoffs to Billboard. “As Motown returns to the Capitol family, certain positions that had been created when we became a stand-alone label have since become duplicative,” the person said in a statement. “These employees are leaving the company and our People, Inclusion and Culture department is helping them find new opportunities — either within or outside of UMG.”
Layoffs were feared by staffers since chairwoman/CEO Ethiopia Habtemariam’s sudden announcement of her departure on Nov. 29, at which point the future of Motown — which had been spun out of the Capitol Music Group into a standalone label in March 2021, with Habtemariam promoted to the top title — was unclear. In the weeks that followed, it emerged that Motown would be consolidated once again into CMG, at which point the prospect of layoffs loomed.
Motown had been under the CMG umbrella since 2014 when Universal Music Group (UMG) dissolved the Island Def Jam Music Group and moved Motown to Los Angeles to operate out of the Capitol Tower. Habtemariam, who had been president of Motown since that year, oversaw the shift from New York to L.A. and in 2015 led the signing of Motown’s landmark partnership with Atlanta-based Quality Control, which brought Migos, Lil Baby, Lil Yachty, City Girls and others to the label. That led to a surge in interest, signings and market share for Motown, resulting in the establishment of the label as a standalone frontline in 2021, with Habtemariam given the chairman/CEO title.
However, just 20 months after assuming that role, Habtemariam announced she was leaving UMG entirely to “pursue new endeavors,” departing a label that had been energized in recent years without a clear leader. As a standalone label, Motown maintained its own A&R and marketing departments, though it shared services such as radio promotion with Capitol.
CMG is run by Michelle Jubelirer, who was promoted from COO to chair/CEO in December 2021, succeeding Jeff Vaughn, who lasted just a year in the role. Jubelirer oversees a record group that also encompasses Blue Note, Astralwerks and Capitol Christian Music Group, in addition to Motown. While its market share remains under CMG, in September indie distributor Virgin was consolidated alongside Ingrooves and mTheory into the Virgin Music Group, whose co-CEOs report directly to UMG chairman/CEO Lucian Grainge.
However, Capitol will not have Quality Control in its purview moving forward, as the label was sold to HYBE America in a deal that was announced Feb. 8. That means that while Capitol will oversee Motown, it will not have any future releases from some of Motown’s biggest stars of the past decade.
Motown is the latest music company to undergo layoffs in recent months, as the global economy’s outlook remains uncertain. The tech sector was hit particularly hard in that respect, with Amazon, Google/YouTube, Spotify, Twitter, SoundCloud, BMI and others shedding jobs; many cited the dwindling advertising market, which has stubbornly retracted. In October, Grainge himself addressed the advertising market’s downturn when speaking about UMG’s third quarter financials, noting that ad-supported streaming revenue grew slower than expected, up just 5.2% over the third quarter period of 2021, though it was offset by increases in other sectors such as subscription, licensing, tour merchandising and publishing.
In 2022, Motown had raised its overall market share to 0.97%, up from 0.90% in 2021. In terms of current market share — music released over the most recent 18 months — Motown grew its share from 1.18% in 2021 to 1.33% in 2022. It had remained part of Capitol’s market share during that period, despite its ostensible status as a standalone entity. Capitol’s overall market share declined from 6.81% in 2021 to 6.40% in 2022, while its current share dropped from 5.64% in 2021 to 4.97% in 2022.
Additional reporting by Gail Mitchell.
BERLIN — Universal Music Group Germany made a distribution deal with the rock band Weimar — then dropped it this week after an article in German magazine Der Spiegel revealed that the group has ties to the right-wing scene in Germany and that at least one of its members previously performed in a neo-Nazi band.
The group’s lyrics refer to violence and portray the media as “bought puppets” as well as wolves and rats — echoing anti-Semitic imagery used by the Nazis. At least one member of Weimar previously played in a band with outright racist and anti-Semitic lyrics, according to Der Spiegel. Another member, Christian P., has been accused of illegally possessing weapons and spreading neo-Nazi propaganda, according to Der Spiegel. Universal has said that Christian P.’s name wasn’t on the band’s recording contract and his exact role in the group is unclear — partly because the band often performs and poses for photographs in masks.
The group’s album came out in May and went to No. 5 on the German albums chart, and its website lists spring tour dates. The band did not respond to an inquiry from Billboard sent to its Twitter account.
“Based on the information we recently learned from a journalist’s inquiry, we terminated our relationship with Weimar, which consisted of distribution of one album,” Universal Music Group says in a statement. “That has been stopped with immediate effect. The information that has come to light made clear that any relationship with the band was absolutely unacceptable to us and inconsistent with our values. We feel deceived by the band. If we knew then what we know today, we would never have released the album in the first place.”
UMG’s decision comes one week after The New York Times revealed how German label BMG signed a rapper known to have Holocaust-denying and anti-Semitic lyrics, Freeze Corleone, to a one-album deal in 2021 and then abruptly terminated the relationship the day before BMG was due to release the project’s first single. BMG executives had debated internally the pros and cons of signing the French artist and had known that UMG had signed and then dropped Corleone in 2020 after distributing his previous album, La Menace Fantôme (The Phantom Menace), for a week. BMG executives in Berlin ultimately overruled their French team after thoroughly reviewing his older music.
In the case of Weimar, several members come from the neo-Nazi scene in the state of Thuringia, according to Der Spiegel. Konstantin P., who Der Spiegel says goes by the name Till Schneider in Weimar, was previously in Dragoner, a neo-Nazi band that recorded songs that denied the Holocaust.
Dragoner was watched by the German Office for the Protection of the Constitution, a domestic intelligence organization charged with protecting German democracy. Steffen P., who Der Spiegel says goes by the name Kurt Ronny Fiedler in Weimar, came to the attention of Thuringian law enforcement when he attended a right-wing concert in 2005.
It’s unclear what Christian P’s role in the group is, but Der Spiegel says he has known both Steffen P. and Konstantin P. for years, and that they previously played together in the group Uncore United, which has songs that sound similar to those of Weimar. Christian P. has been accused of illegal weapons possession and “forming armed groups.” Der Spiegel says that in 2002 he released an album under the name Murder Squad that featured a swastika on the cover and included anti-Semitic lyrics that denied the Holocaust took place — both of which could make it illegal to distribute in Germany.
Weimar’s relationship with Universal was a one-album distribution deal through the band’s label, Harder Entertainment. The article in Der Spiegel suggests that the deal might have been made by the manager of Frei.Wild, a band from South Tyrol, Italy, that has been associated with right-wing imagery but has distanced itself from right-wing politics. UMG did not comment on this at publication time.
DJ Khaled is on the move. During a press conference in Miami (Feb. 9), Khaled announced a partnership with Def Jam Recordings for his We The Best imprint. Under the deal, Khaled will also serve as the global creative consultant to Def Jam and UMG.
Khaled joins the label following an eight-year tenure with Epic Records. His run there included four Billboard 200 No. 1 albums, most recently his 2022 release God Did. He also netted six Hot 100 Top 10 tracks, highlighted by his 2017 chart-topper “I’m The One.”
“This new chapter marks a special time for me,” said Khaled in a press release. “The energy at this point in my career is at an all-time high and I’m grateful to Sir Lucian Grainge for allowing me to join his empire at this stage in my journey. Together, we will achieve even greater heights and take it to the next level. I feel blessed and so inspired with renewed energy. I’m excited to not only partner, but to come back home to Def Jam. Tunji Balogun is not only an extraordinary A&R, but a true music-man and visionary who continuously is responsible for introducing the world to some of its next greatest superstars. I’m excited to join my sister and visionary executive LaTrice Burnette once again, as we have had tremendous success on every single project we have collaborated on in the past. Def Jam is the culture and together we will make history yet once again.”
DJ Khaled is a great artist, hitmaker, mentor, and cultural innovator,” added UMG chairman/CEO Sir Lucian Grainge. “It gives me great pleasure to welcome him home to UMG where we look forward to working together to amplify his brilliant creative instincts and unique vision.”
Def Jam chairman/CEO Tunji Balogun also shared his jubilation regarding Khaled’s signing, saying: “Beyond a proven hitmaker, incredible producer, undeniable artist, and consummate showman, DJ Khaled occupies the rarified air of cultural icon. His uncanny ability to continuously have his finger on the pulse of the culture, to reach audiences all over the world in innovative yet authentic ways, and his remarkable savvy for marketing, promoting and eventizing everything he touches is absolutely second to none. We are thrilled to partner with DJ Khaled and We The Best, both as a multi-platinum, award-winning artist and as a valued executive. Without a doubt, Khaled can only make us better.”
Khaled is fresh off his Grammys performance of “God Did,” which featured Jay-Z, Lil Wayne, Rick Ross, Fridayy and John Legend. He also had five nominations at this year’s show.
“We’re back!” Universal Music Group chairman/CEO Lucian Grainge said to a round of applause, opening the first UMG Grammy week artist showcase in three years due to the pandemic. “A lot has happened in these last three years, but today is about the music.”
UMG’s pre-Grammy artist showcase at Milk Studios has always been about the emerging artists that are coming through the ranks at Universal Music Group in a given year, and the performances are a highly-anticipated event each year. But the pandemic meant that this year’s was the first since 2020, and this edition also included highlights from a series of forthcoming docu-films that the company is set to release.
Grainge spent a few moments in his opening remarks shouting out the artists who were set to perform, as well as those in attendance, which included Elton John, Jon Batiste, Sabrina Carpenter, Yo Gotti, Niall Horan, Fletcher, Ice Spice, Queen Naija and Natalie Jane. “We all know the extraordinary power of music; it touches each of us,” he said. “Music’s power increases in a socially conscious way whenever artists use their talents to promote positive change in our community. When we at UMG employ the vast reach and resources of our company to support our artists in their efforts to promote change, the power of music blossoms even more.”
He then introduced a video that focused on Billie Eilish and her mother’s efforts to address climate change and promote sustainability with her tours and the way she lives her life, as well as UMG’s own efforts to promote sustainability and limit their carbon footprint and waste. Then Grainge introduced Eilish herself, who came out and accepted UMG’s Amplifier Award for her efforts.
“I do as much as I can — I feel like I can always do more — but I feel very impressed and excited that you guys are actually making this a priority and thinking about it and doing your part to support me,” Eilish said while accepting the award. “I would just say I’m really thankful — I feel really seen right now. I spend a lot of my time feeling really anxious because I don’t feel like a lot of people, and especially people in the business, care very much, and it’s really nice to see that this is happening and that you guys do. And I just wanted to say, everyone in this room, we can all do our part. I know a lot of you got some money in your f—in’ pocket, so you can use it for good things and not stupid things,” she added, laughing. She then thanked her mother, and continued, “I’m always trying to think of how to do things in the least wasteful ways possible, and it’s shocking how little I feel that gets reciprocated, and it makes me feel like nobody’s doing anything. So it’s nice to see that you are, and I’m really thankful.”
Then the performances got underway, beginning with Kim Petras, who sang her song “brrr” before bringing out Sam Smith for their chart-topping collaboration “Unholy.” Verve Records artist — and best new artist nominee at this year’s Grammys — Samara Joy then came out to perform a beautifully jazzy “Sweet Pumpkin,” with her vocals taking things to the next level with her trio on stage, and GloRilla hit the stage with highly energetic performances of her songs “Tomorrow” and “FNF.”
Elton John then emerged from the crowd to introduce Stephen Sanchez, a young singer and guitarist signed to Republic Records. John thanked the Universal staff — the label group that he’s been with his entire career — before noting how when he was a young artist he benefited from and valued the support he got from established artists who reached out to him and encouraged him. He then turned his attention to Sanchez, who he compared to Roy Orbison and Ricky Nelson. “I am so thrilled to see this boy, at 20 years of age, taking the reins and writing this great song — he’s gonna be a big, big star,” John said. “I really think he’s the bee’s knees.”
Sanchez then played “Evangeline” and “Until I Found You,” two songs with his retro feel, adding that he wasn’t sure if he was allowed to talk on stage instead of just performing — “It feels like I broke into a party I’m not supposed to be at,” he joked — and thanking Elton before walking off to a big ovation. Singer-songwriter Lauren Spencer-Smith got a huge ovation as well, with the crowd audibly gasping at her vocal performances of brand-new, unreleased track “Best Friend Breakup” and her breakout hit “Fingers Crossed.” And Universal Music Latino signee Feid brought a Latin presence to the afternoon, with guitar-rocking performances of “Tengo Fe” — “the song that changed my life while we were in lockdown,” he noted — and “Porfa.”
Def Jam signee Muni Long showcased her powerful vocals and impressive range with the new, unreleased song “Made for Me,” a gorgeous ballad that will be included on her upcoming debut album, which she added she’s still working on, before shimmering on her own breakout hit from last year, the sultry “Hrs and Hrs.” And TDE/Capitol artist Doechii wowed those in attendance with a breathlessly insistence dance set of “Persuasive” and “Crazy” that packed raw energy into every second of her performance.
The show didn’t just contain performances, but was also an opportunity for Universal to preview three new documentaries that it will be releasing in the coming months, including Love to Love You, a Donna Summer doc directed by her daughter, Brooklyn Sudano, as well as Roger Ross Williams, that will arrive on HBO in May, and a Paul McCartney documentary directed by Morgan Neville focusing on his post-Beatles career in the 1970s, when he had to reinvent himself with his solo work and his band Wings, that is called Man on the Run and will be released in 2024.
Batiste was also on hand to speak about an upcoming documentary that follows his life for the past year, called American Symphony, that explores the emotional highs of his big Grammy wins last year, when he took home album of the year, and the devastating lows of his wife’s cancer battle, a film that he says became about a lot more than he originally envisioned while he worked on his next musical project.
“Making things is difficult. Being an artist is vulnerable process, it’s a vulnerable existence. It takes so much to express the truth of how you feel, where you’re from, to connect to the universal humanism, humanity, that everyone has from the beginning of time until now,” Batiste said, also praising director Matthew Heineman. “It’s like you’re connected to a source that exists on a plane that you can’t see but we can all feel. It’s just as real as this table, just as real as anything. And I really believe the process of that is a messy process. You gotta scrap with it a little bit. You gotta roll around. You gotta get a handle on it. I wanted to make a film that captured the process of it all — a lot of unprecedented moments in my life over this year, highs and lows, intense highs and very intense, near tragic, lows.”
The showcase ended with a surprise set from Shania Twain, whose new album Queen of Me came out this past week. The Canadian icon performed a stripped down “You’re Still the One” and an abbreviated honky tonk “That Don’t Impress Me Much” — complete with a tweak of a lyric to “OK, so you’re Lucian Grainge” — before grabbing an acoustic guitar for “Honey I’m Home.” Twain’s appearance capped an afternoon of star-studded performances, showcasing that UMG has another new crop of young stars with bright futures ahead.
Universal Music Group chairman and CEO Sir Lucian Grainge is calling on music industry executives to come together to get artists paid. Last night (Feb. 1), Grainge addressed an audience of Billboard Power 100 honorees in Los Angeles with the hope that the most powerful business figures in the industry can come together on the side of creatives.
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“Our industry is entering a new chapter where we’re going to have to pick sides, all of us are going to have to pick sides,” Grainge said from the stage in Hollywood. “Are we on the side of FinTech [Financial Technology] and functional music, functional content? Or are we on the side of artistry, and artists?”
Grainge was the first executive to take the stage after Billboard editorial director Hannah Karp opened the ceremony and introduced Grainge who, once again, landed the top spot on the Billboard Power 100 list this year. Grainge takes the top spot as the leader of UMG which reported third-quarter earnings of 2.66 billion euros (approximately $2.9 billion), up 13.3% year over year in constant currency, a fifth-straight quarter of growth since the company spun off from Vivendi in fall 2021.
His call to action was based on the idea of disrupting the music industry, but from those who care most about it. “I’ve always seen opportunity in disruption. And for those of us that have been in the business, made our living out of music, boy have we seen an enormous amount of disruption,” said Grainge. “But the problem is that all too often we’ve let others disrupt our industry. But if we work together across the music community, we can disrupt the status quo instead. And that offers enormous opportunity for real music, real artists. Now, that’s what I call powerful.”
The executive was also quick to thank his colleagues at UMG and provided a shout out to its label Republic Records, which landed the No. 1 label of the year based on current market share. But Grainge’s short and poignant speech focused on his love of music and those who work on behalf of artists.
“Working on behalf of artists and working to grow this industry has been my life’s passion and I’ve been very lucky,” Grainge said. “I feel very strongly that if we’re to succeed, more than ever, we need to come together as an industry, to fight for artists, and for music.”
He continued: “Let’s focus our energy on rewarding those that make great music and those that made music great. Let’s break artists, fight to get them paid, and to give fans real joy.”