universal music group
Page: 5
As artificial intelligence and its potential effects on creativity, copyright and a host of other sectors continues to dominate conversation, the Universal Music Group and electronic instruments maker Roland Corporation have teamed up to create a set of guidelines that the companies published under the heading “Principles for Music Creation With AI.”
The seven principles, or “clarifying statements,” as the companies put it, are an acknowledgment that AI is certainly here to stay, but that it should be used in a responsible and transparent way that protects and respects human creators. The companies say that they hope additional organizations will sign on to support the framework. The seven principles, which can be found with slightly more detail at this site, are as follows:
— We believe music is central to humanity.
Trending on Billboard
— We believe humanity and music are inseparable.
— We believe that technology has long supported human artistic expression, and applied sustainably, AI will amplify human creativity.
— We believe that human-created works must be respected and protected.
— We believe that transparency is essential to responsible and trustworthy AI.
— We believe the perspectives of music artists, songwriters, and other creators must be sought after and respected.
— We are proud to help bring music to life.
The creation of the principles is part of a partnership between UMG and Roland that will also involve research projects, including one designed to create “methods for confirming the origin and ownership of music,” according to a press release.
“As companies who share a mutual history of technology innovation, both Roland and UMG believe that AI can play an important role in the creative process of producing music,” Roland’s chief innovation officer Masahiro Minowa said in a statement. “We also have a deep belief that human creativity is irreplaceable, and it is our responsibility to protect artists’ rights. The Principles for Music Creation with AI establishes a framework for our ongoing collaboration to explore opportunities that converge at the intersection of technology and human creativity.”
Universal has been proactive around the issue of AI in music over the past several months, partnering with YouTube last summer on a series of AI principles and an AI Music Incubator to help artists use AI responsibly, forming a strategic partnership with BandLab to create a set of ethical practices around music creation, and partnering with Endel on functional music, among other initiatives. But UMG has also taken stands to protect against what it sees as harmful uses of AI, including suing AI platform Anthropic for allegedly using its copyrights to train its software in creating new works, and cited AI concerns as part of its rationale for allowing its licensing agreement with TikTok to expire earlier this year.
“At UMG, we have long recognized and embraced the potential of AI to enhance and amplify human creativity, advance musical innovation, and expand the realms of audio production and sound technology,” UMG’s executive vp and chief digital officer Michael Nash said in a statement. “This can only happen if it is applied ethically and responsibly across the entire industry. We are delighted to collaborate with Roland, to explore new opportunities in this area together, while helping to galvanize consensus among key stakeholders across music’s creative community to promote adoption of these core principles with the goal of ensuring human creativity continues to thrive alongside the evolution of new technology.”
As the showdown continues between Universal Music Group (UMG) and TikTok after the world’s biggest record company pulled content by its artists and songwriters from the video-hosting social media site, it seems as though the ban has created a window of opportunity for independent music acts.
A look at the upper echelon of Billboard‘s TikTok Top 50 chart shows that most of the top 20 entries on the chart are independent recordings, including Dasha’s breakthrough “Austin,” Mitski’s “My Love Mine All Mine,” Djo (a.k.a. actor/musician Joe Keery)’s “End of Beginning,” and even Bobby Caldwell’s 1979 song “What You Won’t Do For Love.” Prior to UMG’s TikTok ban, independent artists, music from independent artists already made up a significant portion of the TikTok 50 chart, which debuted in September 2023, but without UMG artists’ or songwriters’ works on the platform — which by Billboard‘s recent estimates affects more than 60% of the most popular songs in the United States — the pathway to success seems more clear than ever.
However, top independent music executives have a message for artists in the sector: “Not so fast.”
Trending on Billboard
As UMG’s ban drags on, independent music executives are advising artists to look at the bigger picture — and also to use this as an opportunity to look at what rights they do and don’t control.
“I truly hope we don’t do what we so often do in the music industry, which is say, ‘Oh, this is an opportunity for me to get a bit of an advantage,’ and then take the advantage, but ultimately damage the ecosystem,” says Richard James Burgess, president/CEO of the American Association of Independent Music (A2IM). “I think we are sort of at a critically bad state, in terms of the amount of money that’s being paid through [to artists]. That works out fine if you’re an aggregator, distributor or label, and you’ve got enough copyrights. But it’s extremely difficult for the artist to generate enough copyrights to make a living from if someone’s not a household name.”
Burgess continues, “TikTok is an extremely bad actor in terms of the types of deals they do and the structure of their deals. It’s almost like trying to play the lottery — if you get a viral TikTok, it can have an impact on your sales, but how much money does TikTok make from us trying to get that sort of viral spike? They should be paying for the use of music and they’re effectively not paying. I think Universal did a great thing here, and my membership, my board, supports that position.” (A rep for TikTok has declined to comment for this story).
In a 2022 Billboard story, one executive from an independent label noted that artists on his roster earned approximately $150 from TikTok from around 100,000 videos that were made with their music. Meanwhile, in the same report, a marketer who spearheaded a campaign for a music single that was used in approximately half a million TikTok videos noted that his artist earned less than $5,000 from TikTok, though views rose into the billions.
While there are opportunities for increasing numbers of independent artists to gain greater traction on TikTok during the platform’s impasse with UMG, “it’s important for artists to use the opportunity to focus on their own art instead of chasing trending sounds or being the one-millionth person to cover a hit song,” says Jody Whelan of independent record label Oh Boy Records, which was founded in 1981 by the late singer-songwriter John Prine and which now represents music from Prine, Kelsey Waldon and Arlo McKinley, among others. “If you’re lucky enough to go viral on TikTok, you want folks to stick around to hear what you have to say.”
For many contemporary acts, TikTok is a key component of their marketing plans, with labels and managers urging artists to create content in hopes of driving listeners to streaming platforms. A 2023 report, commissioned by TikTok and facilitated by Luminate, noted that 62% of U.S. TikTok users pay for a music streaming service, compared to 43% of all consumers.“TikTok user engagement metrics are strongly associated with streaming volumes,” in the United States, the report stated. “In other words, higher TikTok engagement — whether that’s likes, views or shares — corresponds with elevated streaming volumes.” The report also noted that TikTok users are more engaged with other areas of music-related consumption, claiming that in the United States, 45% of TikTok users purchased music-related merch over a year-long span, compared with 35% of overall music listeners, while 38% of TikTok users attended a live music event during the year, compared to 33% of overall music listeners.
Even with stats like these, Whelan says the TikTok/UMG battle should serve as a cautionary tale to realize how even so-called independent artists can get caught in the ban’s web because of an affiliation with UMG or UMPG. “This should also serve as a reminder to the independent community: You can’t rely on someone else’s platform to reach your audience,” Whelan says. “This month it’s UMG, next month it could be your distributor. The algorithms and priorities of social media companies and the streamers continuously shift. You have to be able to control the means in which you communicate directly with your audience, whether that’s by email or by text (we also still send out postcards to our fans!).”
Stem CEO Milana Lewis agrees, seeing the situation as a “great moment to highlight the difference between independence and autonomy. Artists believe they’re independent when they do a deal with the independent distribution arm of a major label because their deal terms might be more flexible. In reality, they still have very little control over their rights, and this is a great example of how a big corporation is deciding on their behalf whether or not their music is available on a platform and whether or not they are willing to trade off earnings for exposure.”
Independent artists should be taking this time to examine their relationships with all social media and make sure they are taking full advantage of each platform despite TikTok’s current dominance, says Seth Faber, Stem’s general manager of music distribution and payments. “Time will tell if Universal’s maneuver will lead to a meaningful redistribution of the viral pie. In the meantime, artists should continue to lean into the full landscape of snackable content,” Faber says. “The power of Instagram’s Reels, Spotify’s Clips and YouTube’s Shorts aren’t to be ignored. Diversify those content portfolios.”
For Burgess, UMG vs. TikTok is a repeat of an age-old battle pitting the industry against artists, with artists often coming out on the short end of the stick. “[TikTok] plays this promotional exposure-discovery game. How many times do we get sucked into that?” Burgess asks. “Radio hasn’t paid [artists] for recorded music. MTV didn’t pay. We keep making the same mistakes. Good thing is that Universal is big enough, and especially with the publishing and everything, the tendrils from that go far and wide.”
Burgess further likens the UMG-TikTok battle with the ongoing battle with secondary ticket markets, saying that most of the money is not making its way to artists. “That is the essence of the problem,” he says. “It would be good if people did the right thing here and stood together to get a better deal for everybody.”
A year ago, Matt Najdowski, like many business managers for top artists, was routinely going over royalty statements when he discovered an unusual plunge in revenue.
For years, Pandora, the internet-radio streaming service, had paid 50% of song royalties to the artists through a collection agency called SoundExchange. But suddenly, artists signed to Universal Music Group were receiving a much lower percentage, similar to what they received from on-demand streaming services like Spotify or YouTube. And the payments were now arriving directly from UMG instead.
Najdowski researched further and learned UMG was able to change the way it reported Pandora revenue because Pandora itself had changed. In 2016, the streaming service began evolving from webcasting to a Spotify-style “search and play what you want” model. Because Pandora now offers an interactive service, rather than a non-interactive webcaster, it needed to make new deals with labels rather than relying on a government-mandated compulsory license at a standardized rate.
Trending on Billboard
As such, UMG and other labels were able to change the flow of royalties so they collected and paid them directly — rather than SoundExchange distributing to artists, as law mandates under these compulsory licenses. With UMG’s change in policy last year it became the first and only label so far, according to sources, to take advantage of this change. With that, the royalty splits for artists changed, too, from a 50% split through SoundExchange to whatever, often smaller, percentage their record deals dictated for on-demand streaming revenues. That’s significant as the world’s biggest record label contributed $135 million to SoundExchange as part of its Pandora share for artists, according to Billboard estimates based on financial reports and other public information.
“That specific royalty stream can range from a couple hundred dollars per month to a couple thousand. It can be a significant amount of money,” says Najdowski, royalty manager for Farris, Self & Moore. This change in accounting, he adds, “is more or less taking money out of [artist’s] pockets.”
Perhaps most notably, Najdowski discovered that the many UMG artists who are unrecouped – meaning they have yet to earn back the money the label spent on recording, marketing and other costs – were receiving a worrisome amount: zero. These acts were previously being paid directly by SoundExchange, so their unrecouped status with UMG was not an issue for these royalties. “A lot is being withheld, and it feels like a grab for money from the labels,” says Heather Gruber, royalty manager for Fineman West, a business-management firm that represents artists.
Although Pandora has struggled in recent years – monthly users have dropped from 81.5 million in 2014 to 46 million in 2023 – it remains a potent outlet for hitmakers such as SZA, Megan Thee Stallion and Lil Durk, as well as bubbling-under singles like contemporary-Christian singer-songwriter Lauren Daigle’s “These Are the Days.” Newer artists rely on the exposure, too, and Pandora royalties have provided crucial revenue while they absorb touring and merch expenses. “If you’re making millions of dollars, this isn’t going to have a big impact on you,” says Harold Papineau, associate lawyer for King, Holmes, Paterno and Soriano, which represents Metallica and others. “But if you’re living paycheck to paycheck, then this is a significant problem. Now you’ve lost money that you may have relied on to pay your bills.”
In a statement, a UMG representative responded by explaining the difference between interactive (like Spotify, YouTube and Apple Music) and non-interactive streaming services (like internet radio). For the former, recording royalties are “subject to direct negotiation between an individual rights owner and the service,” the rep said, adding that Pandora “has substantially changed its functionality such that it has evolved into an interactive service, where users can select tracks on demand.” In other words: The label has every right to make this change.
Still, UMG didn’t fully change the way it reported the royalties to artists until 2022, and it caught many business managers and music attorneys by surprise. “It kind of happened in the dead of night,” says Mike Merriman, a business manager for the firm PARR3 who represents DJ Alison Wonderland, singer 6lack and producer Louis Bell, among others. “It does create some ambiguity and lack of transparency.”
When the Pandora change first kicked in, business managers were confused about the streaming service’s identity. “We’re still running analysis on it,” says Erica Rosa, owner/vp of royalties and contract compliance at FBMM, a business management firm that represents top artists. “I’ve asked a lot of questions to attorneys and various industry figures: ‘How would you define Pandora? Would you consider it to be an interactive or non-interactive stream? I don’t know that anyone has given a clear definitive answer yet.”
Additional reporting by Glenn Peoples.
Mercury Records is expanding its executive team amid the broader restructure of Universal Music Group’s labels, the company announced today (March 13). The news comes as the label, which had been operating as an imprint of Republic Records since its relaunch in April 2022, has a hand in the top two albums on the Billboard 200 this week — Morgan Wallen’s One Thing At a Time (Big Loud/Mercury/Republic) and Noah Kahan’s Stick Season (Mercury/Republic).
Now, with the reorganization of UMG’s East Coast labels under Republic co-founder/CEO Monte Lipman, Mercury joins Def Jam, Island and Republic as part of the larger group, with a central organizational hub called Republic Corps. helping each label with marketing, promotions, publicity and legal support. And Mercury president Tyler Arnold and general manager Ben Adelson have made three appointments to their team in the new operation.
Trending on Billboard
Alex Coslov, a marketing veteran who had worked across both Mercury and Republic, will now be working full time at Mercury as its new executive vp, while Republic senior vp of media Marisa Bianco slides over to work on Mercury full time, while also reporting in to Republic Corps. head of media Joseph Carozza. Additionally, the label hired Mario Vazquez as vp of audience and streaming, who will work at Mercury while also reporting in to Republic Corps. executive vp of global commerce and digital strategy Kevin Lipson.
“Ben and I are thrilled to welcome Alex, Marisa and Mario to our team at Mercury Records,” Arnold said in a statement. “From day one, our goal has been to foster a creative, supportive and forward-thinking home for our artists to thrive. We are incredibly grateful to expand our team with this talented group of executives who will help further that mission as we usher in our next chapter.”
Arnold and Adelson are themselves Republic veterans, emerging from the A&R department at the label, and when the imprint relaunched in 2022 it came with several artists and partnerships that Arnold and Adelson had signed at Republic, including Post Malone, Kahan, James Bay, Lord Huron, Jeremy Zucker and others, as well as Republic’s relationship with Big Loud for Wallen, which Arnold had originally brokered. The label is also home to Stephen Sanchez, Zayn and AJR, among others.
As the broader restructuring of the Universal Music Group’s label operations continues on the West Coast with the newly-formed Interscope Capitol Labels Group, the East Coast labels have now also begun to unveil their new structure under chairman/CEO Monte Lipman, with a new name of its own: Republic Corps.
The new structure and designation is set to be the umbrella “central operational hub” for each of the labels underneath it, with former Republic Records co-president Jim Roppo serving as president and COO of the new overarching group, reporting to Monte Lipman and Avery Lipman.
Each of the labels have individual leaders, many of whom remain in the same roles they had prior to the reorganization: Republic Records will now be led by president and chief creative officer Wendy Goldstein, formerly co-president of Republic alongside Roppo; Mercury Records will continue to be led by president Tyler Arnold and general manager Ben Adelson; Island Records will remain under the purview of co-CEOs Justin Eshak and Imran Majid; Def Jam Recordings will remain under chairman/CEO Tunji Balogun; and IMPERIAL Music/Casablanca Records will still be run by president Glenn Mendlinger. According to a release, each of the labels will maintain “full independence and autonomy” under the new structure.
Trending on Billboard
Roppo, leading the Republic Corps. teams, will work across each of the labels, with former Republic head of global commerce Kevin Lipson becoming his “chief lieutenant,” with an expanded role that will encompass revenue strategy at the group. They will lead a series of shared departments, led by executives from several different East Coast label teams.
Former Republic Records head of promotion Gary Spangler will take up the same title in the new Corps., with support from former Republic Records exec Lucas Romeo and former Island promotions head Ayelet Schiffman in support, and format leads that include former Def Jam exec Natina Nimene overseeing urban; and former Republic execs Gary Dumler overseeing pop, Davey Dee Ingenloff overseeing rhythm, Manny Simon overseeing adult and Amanda Dobbins overseeing rock.
Most recently general manager of Island Records, Mike Alexander is moving to a new role overseeing global marketing at Republic Corps, with a team consisting of Myra DeCastro (Def Jam), Steve Rowen (Island) and Zoe Briggs (Republic/Mercury). Additionally, former Republic head of media Joseph Carozza will lead media strategy for the Corps, with a team consisting of Beau Benton (Republic), Marisa Bianco (Mercury), Lauren Ceradini (Def Jam) and Lauren Schneider (Island).
On the legal side, two executives that previously worked for parent group Universal Music on behalf of all of the East Coast labels will retain their titles under the new Republic Corps. designation: Steve Gawley will remain as executive vp of business & legal affairs and business development, while Joe Schmidt retains the title of executive vp/CFO, both of whom will report directly to the Lipmans. Additionally, Republic Corps. will include teams led by Jenny Beal (Production), Brittney Ramsdell (creative synch), Meredith Oliver and Liza Corsey (A&R administration) and a data and analytics team, according to a release.
The new Republic Corps. structure comes amidst the broader reorganization of the Universal Music Group labels announced by UMG chairman/CEO Lucian Grainge on Feb. 1, which divided the labels into an East Coast-West Coast structure, with Republic Corps. comprising the East Coast division. The West Coast labels, under chairman/CEO John Janick, have been reformulated as the Interscope Capitol Labels Group, with that structure coming into focus over the past week. Both companies have been undergoing extensive layoffs as part of the reorganization, which included the combining of many labels’ promotions and publicity staffs into shared services divisions, among other moves.
A week after chairman/CEO John Janick introduced the newly-formed Interscope Capitol Labels Group and named several members of his C-suite to top roles, the structure of the divisions of the new company are coming into focus with a slew of announcements.
On Monday (March 11), Janick named the members of Interscope Geffen A&M’s new pop/rock and urban music teams, with 13 executives receiving new remits within the new structure, including three co-presidents of Interscope Geffen A&M. The duo in charge of pop/rock are IGA co-president/head of creative strategy Michelle An and IGA co-president/head of pop/rock A&R Sam Riback, with executive reporting to them including executive vp of pop/rock A&R Matt Morris; co-heads of pop/rock digital Chris Mortimer and Kirsten Stubbs; senior vp of pop/rock marketing Adrian Amodeo; and vp of pop/rock visual creative Chelsea Dodson.
The urban music team will be lead by IGA co-president/head of urban A&R Nicole Wyskoarko alongside executive vp/head of urban marketing Laura Carter, with president of Geffen urban A&RB Aaron “Dash” Sherrod and executive vp/head of urban digital Ramon Alvarez-Smikle. Reporting to them are senior vp of urban marketing and strategy Lola Plaku and senior vp of visual creative/head of urban creative Andrew Ibea.
Trending on Billboard
(Top Row L-R) Andrew Ibea, Aaron “Dash” Sherrod, Nicole Wyskoarko, Matt Morris,
Chelsea Dodson, Sam Riback, Ramon Alvarez-Smikle, Lola Plaku.
(Seated Row L-R) Laura Carter, Kirsten Stubbs, Adrian Amodeo, Chris Mortimer, Michelle An.
Courtesy of ICLG
Almost all the executives across those two departments continue from Interscope Geffen A&M, where they had previously worked under Janick.
“Each of these executives exemplifies the culture of innovative thinking, entrepreneurial spirit and wide-ranging success that have long defined IGA,” Janick said about them in a statement. “As we continue to solidify our team and finalize the redesign of our broader company, we are creating a modern music company that will set the standard for our industry and provide the optimal environment in which our artists can thrive and achieve excellence in music.”
Today (March 12), Janick named another 13 executives to roles in the corporate leadership of ICLG, working across both IGA and Capitol Music Group, consisting of a mix of executives from both previous labels who will be reporting in to C-suite leaders announced last week.
Steve Berman, ICLG’s vice chairman, will oversee departments that will be led by executive vp of urban promotion Bill Evans; executive vp/head of media Ambrosia Healy; senior vp of sports and gaming Dave Nieman; executive vp/head of strategic marketing & brands Daniel Sena; and senior vp of creative synch licensing Jenny Swiatowy. Of those, Evans, Healy and Swiatowy came from Capitol, while Nieman and Sena remain from Interscope.
ICLG general manager and chief revenue officer Gary Kelly, meanwhile, will oversee departments led by senior vp of production Gretchen Anderson; senior vp of revenue Nicole Csabai; executive vp of international marketing Jurgen Grebner; vp/head of analytics Wayne Laakko; president of promotion/ICLG executive vp Greg Marella; and executive vp of direct-to-consumer strategy Xavier Ramos. Of those, Anderson, Csabai, Grebner, Ramos and Laakko remain from Interscope, while Marella comes from Capitol.
Finally, under ICLG CFO Geoff Harris, who reports to ICLG COO Annie Lee, are vp of A&R administration Steve Cook and vp of artist relations Kim Valderas. Both Cook and Valderas come from Capitol Music Group/Motown Records.
Courtesy of ICLG
“Naming these executives to company-wide positions further strengthens and solidifies our redesign of ICLG,” Janick said in a statement about the new positions today. “IGA’s and CMG’s core label teams are now able to draw upon the best-in-class skills and expertise for all of their artists, as well as more ably secure a broad array of opportunities and experiences throughout the world.”
The new Interscope Geffen A&M team joins the recently-installed new executive team at Capitol Music Group, which consists of former Geffen boss Tom March as chairman/CEO and UMPG veteran Lilia Parsa as president, following the departures of prior CMG chair/CEO Michelle Jubelirer and president Arjun Pulijal. The moves are all part of the major overhaul of the Universal Music Group label structure that UMG chairman/CEO Lucian Grainge first announced on Feb. 1, which moved UMG’s West Coast labels — Interscope, Geffen, A&M, Capitol, Blue Note, Priority, Verve and Motown — under Janick’s purview at ICLG, and its East Coast labels — consisting mostly of Republic, Def Jam, Island and Mercury — under Republic co-founder and CEO Monte Lipman. News of the new East Coast structure is also expected soon. The company has been going through extensive layoffs in the past week, as IGA and Capitol formally merge together and the East Coast teams are being solidified.
Capitol Music Group co-president Arjun Pulijal has stepped down from his role after 11 years at the company, he announced in an internal memo obtained by Billboard.
The move comes amid a broader executive shakeup atop the company, as former CMG chair/CEO Michelle Jubelirer stepped down from her role on Feb. 6, with Geffen president Tom March coming in to replace her and UMPG veteran Lilia Parsa named co-president the following day.
Pulijal was named CMG president by Jubelirer in January 2022, shortly after she ascended to the top role. Prior to that, Pulijal had run the marketing department at Capitol Records; he initially joined Capitol in 2013 after a seven-year stint at Epic Records.
Trending on Billboard
“Today marks my 11 year anniversary at Capitol Music Group,” Pulijal wrote in the memo. “[Eleven] years of aspiring to help artists of all types in whatever way I could. [Eleven] years of a commitment to honor an iconic music company’s legacy and embrace disruption to modernize it in equal measure. [Eleven] years of working with incredible people and building relationships that transcend the word ‘colleague.’ … It is surreal and difficult to say goodbye to a company I’ve called home for over a decade. I’ve had the unique experience of growing my career at Capitol. From campaign builder to artist confidant to leader, I’ve seen this company through many lenses.”
Pulijal’s departure comes days after Capitol’s parent company Universal Music Group began the process of laying off dozens of people at Capitol and other labels as part of a broader restructuring of the company’s label divisions, which UMG chairman/CEO Lucian Grainge first announced Feb. 1 and which was confirmed Feb. 28. As part of that overhaul, Interscope Geffen A&M chairman/CEO John Janick received oversight of Interscope, Geffen, Capitol, Motown, Priority, Verve and Blue Note, while Republic Records CEO Monte Lipman will oversee Republic, Def Jam, Island and Mercury.
“I feel for all of those people exiting the company this past week, many of whom didn’t have the luxury of choice like I did,” Pulijal wrote, nodding to the layoffs at Capitol. “Know that you and I are leaving on a high note. You were all a vital part of the success we had over the last few years in particular. We built a company based on a shared love of music, artistry, creativity, diversity, transparency, empathy, and efficiency in a complex and unforgiving marketplace… and we had historic success doing it. I will carry those values forward into the future, to wherever my journey goes from here. When I figure it out, you all will be the first to know.”
Read Pulijal’s full memo below.
Today marks my 11 year anniversary at Capitol Music Group.
11 years of aspiring to help artists of all types in whatever way I could.
11 years of a commitment to honor an iconic music company’s legacy and embrace disruption to modernize it in equal measure.
11 years of working with incredible people and building relationships that transcend the word ‘colleague’.
In a bittersweet & appropriately full-circle turn of events, today I am announcing that I have made the decision to leave my position as President of Capitol Music Group.
It is surreal and difficult to say goodbye to a company I’ve called home for over a decade. I’ve had the unique experience of growing my career at Capitol. From campaign builder to artist confidant to leader, I’ve seen this company through many lenses. We’ve always valued storytelling to help artists connect with audiences, so I of course couldn’t depart without telling a story:
When I assumed the position of President, I received many notes of congratulations from past Capitol employees that I’d never met, many of whom worked for the company decades ago and had long since departed. It was evident that this iconic company continues to hold such an important place in people’s lives and music history. One such note pointed out that I was named President exactly 50 years after the legendary late Bhaskar Menon held the same position. As a person of Indian descent and one of the (sadly) few AAPI leaders in music, knowing that someone with my same cultural background succeeded in this role was beyond inspiring. I read everything I could about his intrepid life and career, including speaking with colleagues and his family. While he achieved monumental success with artists and records, it was clear the most enduring part of his legacy was how he treated people. He embraced constructive confrontation, leading with honesty and grace. These were virtues I always aimed to honor.
It’s about people first.
When artists ask me why they need a label, I always say “it’s about the people.”
I feel for all of those people exiting the company this past week, many of whom didn’t have the luxury of choice like I did. Know that you and I are leaving on a high note. You were all a vital part of the success we had over the last few years in particular. We built a company based on a shared love of music, artistry, creativity, diversity, transparency, empathy, and efficiency in a complex and unforgiving marketplace….and we had historic success doing it. I will carry those values forward into the future, to wherever my journey goes from here. When I figure it out, you all will be the first to know.
I leave with an overwhelming sense of gratitude for the artists and staff, & wish the new leadership – John Janick, Steve Berman, Tom March, & Lillia Parsa – nothing but the best moving forward. I will be available to help in the background with transition over the coming weeks before officially departing later this month.
Thank You.
It’s been a nerve-wracking week for Universal Music Group employees — many did not know when they went to the office on Wednesday morning if they’d have a job on Friday. Layoffs hit department heads first and then started to impact the rank and file.
Over the past year, more than a dozen companies across the music business have undergone layoffs, eliminating thousands of jobs and leaving those who remain in a state of uncertainty. In the past twelve months alone, Warner Music Group, Atlantic Music Group, SiriusXM, Amazon Music, TikTok Music, CAA, Discord, BMG, TIDAL and Spotify have all cut staff.
This week, Universal Music Group followed suit, instituting layoffs in search of around $270 million in annual savings. The process started Wednesday and continued through Friday (March 1), impacting publicity departments, radio teams, A&R, marketing and more.
Trending on Billboard
The cuts are part of a restructure of UMG’s label operations that chairman/CEO Lucian Grainge announced in an internal memo on Feb. 1. The shift reorganized the company loosely into an East Coast-West Coast orientation, with Republic Records CEO Monte Lipman overseeing Republic, Def Jam, Island and Mercury, and Interscope Geffen A&M chairman/CEO John Janick responsible for Interscope, Geffen, Capitol, Motown, Priority, Verve and Blue Note.
For UMG employees, the long runway leading into the layoffs — which were first hinted at back in October — combined with the fact that the company announced on Wednesday morning that it had earned more than $12 billion in revenue and $1.3 billion in net profit in 2023, has caused frustration, anger and anxiety, even for those who kept their jobs. That the layoffs came immediately following the annual earnings report, sources say, has led to greater frustration.
Though the scenes employees describe are typical for any company undergoing large-scale layoffs — the slow drip of news about who’s been let go, and colleagues crying as they pack up their desks, for example — UMG’s layoffs have had an outsized impact on industry morale because of the label’s position as the dominant market leader, its strong financial results and the extended period for which employees have known the cuts were coming.
In an email to staff, Grange said that “by reimagining our global structure, we are creating a blueprint for a future where our labels are empowered with new capabilities and additional agility, ensuring they can sign and support artists with enhanced access to UMG’s highest-performing internal teams and resources.” He added, “This organizational redesign represents a new paradigm for artist support and fan engagement.”
UMG first signaled its cuts during an earnings call with financial analysts at the end of October. “[We] are currently conducting a careful review of our cost base, which we will complete over the coming months, and we will update you when appropriate about an anticipated cost savings program to commence in 2024,” said Boyd Muir, the company’s executive vp and CFO. Grainge added that the company planned to “cut overheads in order to grow elsewhere.”
Earnings calls are, by nature, full of statistics and jargon like “adjusted EBITDA.” In January, the human cost of “cutting overhead” started to become clear: That would mean laying off hundreds of employees. In a statement at the time, UMG said “we are creating efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market, while realizing the benefits of our scale.”
The October earnings call did not make big headlines at the time. But many employees saw the January reports that layoffs were looming. “Every day I wake up thinking, is this the day I lose my job?” a UMG employee said in February.
“It is a particular kind of torture to leave people guessing for an extended period of time,” adds a music lawyer who has artist clients signed to UMG labels. “Your job is your No. 1 source of security. You add on top of already stressed individuals’ psyche the uncertainty of whether or not they’re gonna have a job tomorrow and draw that out for months.”
A UMG spokesperson declined to disclose any headcount for the cuts. In the meantime, sources say executives and department heads have received some generous exit packages on their way out the door.
For others outside the labels who work with them on behalf of clients, the layoffs — at UMG, at Warner, where dozens were recently let go at Atlantic Records, and amid rumors that other labels will be following suit — have also made life difficult. With UMG specifically, one manager with an artist signed to a UMG label says that the stress permeating the labels has made it hard to plan a rollout for his act. And a second music attorney notes that it’s been hard to do record deals within the UMG system knowing that the teams his artist speaks with may not be around by the time the deal is done.
Artist teams are also trying to understand how the cuts impact them. “The more I hear, the more stressed I am,” says another manager. There are “lots of firings across different positions. Some people are getting moved into jobs they aren’t in any way prepared for. And some people are now being asked to do what was previously three different jobs at once.”
There are more cuts to come in a “phase two” of the “strategic organizational redesign” next year, according to UMG’s investor presentation this week, which stated that “a combination of further ex-U.S. headcount reduction and other operational efficiencies” was set to begin in 2025. But not a single financial analyst asked questions about the extent of the layoffs on Wednesday. Instead, they asked about UMG’s battle with TikTok.
Universal Music Group (UMG) shares rose 4.9% on Thursday (Feb. 29), the day after its fourth-quarter earnings revealed record revenue of 11.1 billion euros ($12 billion) in 2023 and strong subscription-related growth in the fourth quarter. The music giant’s stock finished the week up 2.3% to 27.87 euros ($30.25), bringing its year-to-date gain to 6.8%.
Investors also received details about the financial impacts of UMG’s company-wide layoffs. A reduction in global headcount is expected to save 75 million euros ($81.3 million) in 2024, 125 million euros ($135.5 million) in 2025 and 250 million euros ($271 million) annually by 2026. UMG has not specified the number of employees being laid off, but Billboard had identified nearly 50 across the company by Friday afternoon (Mar. 1). A second phase of layoffs and “other operational efficiencies” is scheduled to begin in 2025 and run through 2026, according to UMG’s latest investor presentation.
In reducing its headcount and eliminating some positions, UMG is “redesigning our organization to enhance our capabilities in the areas most critical to our future growth and success,” CFO Boyd Muir said during the earnings call Wednesday (Feb. 28). “These changes will strengthen our leadership team, foster innovation and create significant efficiencies across our business.”
Trending on Billboard
Also enjoying gains this week were some of the other largest companies in the 20-member Billboard Global Music Index. Spotify rose 3.0% to $263.75, Warner Music Group improved 3.2% to $35.48 and Live Nation increased 1.9% to $97.15. The index itself rose 1.9% to a record 1,715.81, with 11 stocks in positive territory.
Stocks had another strong week in the United States overall. On Friday, the Nasdaq composite surpassed its previous high from 2021 and finished the week up 1.7% to 16,274.94. Chipmaker Nvidia rose another 4.4% to $822.79 this week after gaining 8.5% the previous week. Meta shares were up 3.8% to $502.30 following its announcement on Thursday that it will “deprecate” (i.e. remove) its Facebook News tab in the United States and Australia. The S&P 500 gained 0.9% to 5,137.08 — its first close over 5,100.
In the United Kingdom, the FTSE 100 fell 0.3% to 7,682.50. South Korea’s KOSPI Composite index fell 0.9% to 2,642.36, mirroring the declines of K-pop companies HYBE (down 7.6%), SM Entertainment (down 2.5%), JYP Entertainment (down 3.4%) and YG Entertainment (down 3.9%). China’s Shangai Composite Index gained 0.7% to 3,027.02.
Sphere Entertainment Co. was music’s greatest gainer of the week after its share price rose 8.4% to $44.29. The price jumped 6.2% on Thursday after an SEC filing revealed chairman/CEO James Dolan acquired an additional 59,000 shares, ranging from $40.48 to $41.46 per share. Less impactful to the share price was TMZ‘s news that the Eagles are in talks for a fall residency at the $2.3 billion Sphere in Las Vegas. After U2’s residency ends this weekend, Sphere will host Phish for four dates in April and Dead & Company for 24 dates spanning from May 16 to July 13. Sphere shares have gained 30.3% year to date.
French music streamer Deezer was the next-best performer of the week after gaining 5.1% to 2.25 euros ($2.44). The company reported fourth-quarter earnings on Thursday that showed improvements in subscriber court and average revenue per user. Revenue of 130.7 million euros ($141 million) was up 12.1% from the prior-year period. The same day, Deezer also announced the departure of CEO Jeronimo Folgueira. “Deezer is back on a growth trajectory and can now build from a solid foundation,” said chairwoman Iris Knobloch.
Believe shares rose 4.2% to 15.50 euros ($16.82) after the French music company announced that it received interest from a third party; a consortium consisting of founder Denis Ladegaillerie and two major shareholders launched a bid in February to take the company private at 15.00 euros per share. On Friday, Believe revealed it received “a confidential exploratory non-binding approach” from another party that valued the company at “at least” 17.00 euros ($18.45) per share. Believe was careful to note the third party’s approach did not constitute an obligation to make an offer. Still, the appearance of another possible bidder was enough to push Believe’s share price above the consortium’s earlier 15.00 euros-per-share bid.
Shares of Chinese music streamer Cloud Music dropped 0.5% to 90.45 HKD ($11.55). The company announced Thursday that music subscribers grew 8.7% to 205.9 million in the fourth quarter, with subscription growth helping revenue from online music services increase 17.6% to 4.4 billion RMB ($611 million) — although total revenue fell 12.5% to 7.78 billion RMB ($1.09 billion). Gross profit improved 63% to 2.1 billion RMB ($292 million) and net profit improved to 818.5 million RMB ($114 million) from a net loss of 114.6 million RMB ($16 million) in 2022.
iHeartMedia shares fell 2.6% to $2.26 after a seesaw week for the country’s leading radio broadcaster. The stock rose 22.0% to $2.77 on Thursday after the company’s fourth-quarter earnings report suggested the fog might be lifting from an advertising slowdown that has hurt broadcast radio revenues. After fourth-quarter revenue fell about 5%, iHeartMedia’s first-quarter revenue is expected to be down 2% to flat. Podcasts were a bright spot, growing 16.6% in the fourth quarter and 13.8% for the full year. Nearly all of Thursday’s gain was erased on Friday, however, when iHeartMedia shares fell 18.4%.
Cumulus Media suffered the largest loss amongst music stocks after falling 20.4% to $3.74. On Tuesday (Feb. 27), the radio broadcaster said its 2023 revenues fell 11.4% to $844.5 million and announced a debt exchange offer that would allow lenders to swap 6.750% notes due 2026 for 8.750% notes due 2029. The company is also offering to exchange term loans under a 2019 credit facility for new term loans.
The breakdown in licensing talks between Universal Music Group (UMG) and TikTok affects far more than Universal recording artists and songwriters.
Every now and then, a music company pulls its recorded music catalog, publishing catalog or both from a digital service provider after licensing talks break down — Warner Music Group did this with YouTube in 2008, for example. It happened again starting Feb. 1 when UMG started pulling its recordings from TikTok after the two companies couldn’t come to an agreement on a new licensing deal.
The licensing breakdown first affected artists signed to UMG record labels. Take the Q4 Hot 100, a list of the top 100 tracks in the fourth quarter. UMG’s various record labels — including Republic Records and Interscope Records — released 41 of the 100 tracks, among them Taylor Swift’s “Cruel Summer,” Doja Cat’s “Paint the Town Red” and Brenda Lee’s “Rockin’ Around the Christmas Tree.”
Trending on Billboard
On Tuesday (Feb. 27), TikTok began removing compositions part-owned by Universal Music Publishing Group (UMPG). On the publishing side, UMG has an interest in 40 of the Q4 2023 Hot 100 tracks, such as SZA’s “Snooze” (a track released by Sony’s RCA Records), Jack Harlow’s “Lovin on Me” (a track released by Warner Music Group’s Atlantic Records) and Usher’s “Good Good” (a track released by gamma, an indie newcomer).
Since every recording involves two copyrights — one for the master recording, one for the composition — the damage of UMG’s decision to pull its repertoire from TikTok is larger yet. Counting both recorded music and music publishing, UMG has an ownership interest in 61 of the Q4 2023 Hot 100 tracks. Twenty of those 61 tracks have a UMG publishing interest but were not released by a UMG-owned record label. Another 20 of those tracks have a UMG publishing interest and were released by a UMG record label. UMG does not have a publishing interest in the remaining 21 of those tracks that were released by a UMG record label.
That’s far larger than UMG’s market share in either recorded music or publishing. UMG had a 39.4% share of U.S. recorded music by distribution in 2023 (a 29.4% share by ownership) and a 15.8% publisher’s market share of the Hot 100 in the fourth quarter of 2023.
Ownership interest, not market share, gets to the true impact of the UMG-TikTok impasse. Today’s popular songs have multiple co-writers, each of whom might have a different music publisher. When a track includes a sample or interpolation of another composition, those works’ songwriters get credits on the new work, too. The 41 tracks on the Hot 100 in which UMG has a publishing interest have an average of 5.5 songwriters. Eight of those 41 tracks had 8 or more co-writers; four of them had 10 or more co-writers. Of the 41 tracks with UMG ownership interest, only Irving Berlin’s 83-year-old “White Christmas” was written by one person.
The more songwriters who are on a single track, the higher the odds that any one music publisher can remove a track during a licensing dispute. An example of this complexity is “What It Is (Block Boy)” by Doechii featuring Kodak Black, released by UMG-owned Capitol Records (the track entered the Hot 100 in May thanks to success on TikTok). The recording includes a sample of TLC’s 1999 hit “No Scrubs” and interpolates a hook from “Some Cut” by Lil Scrappy and Trillville, which reached No. 15 on the Hot 100 in 2005. “What It Is (Block Boy)” has 16 co-writers, including the 4 co-writers of “No Scrubs” and 6 co-writers of “Some Cut.”
A wide swatch of the music publishing business is represented in “What It Is (Block Boy).” The Music Licensing Collective’s public database lists 7 different publishers attached to the composition: UMPG, Sony/ATV, Warner Chappell Music, Disney, BMG, Concord and Reservoir Media. UMPG’s 3% collection share is the smallest of the seven publishers.
To be sure, the Hot 100 from the fourth quarter of 2023 isn’t a perfect reflection of what is currently most popular — or would be popular if not for the licensing impasse — at TikTok. The TikTok Billboard 50 shows the platform’s most popular music is a mix of Hot 100 staples (“Lovin On Me”) and indie music that otherwise wouldn’t be seen on a Billboard chart (Aphex Twin’s “QKThr”).
This headline-grabbing development isn’t a story of one music company against one tech company; labels and publishers that renewed their licensing deals with TikTok have unwillingly joined UMG’s battle with the platform. UMG’s inability to reach a deal with TikTok impacts every major label group and likely touches every music publisher of note.