Universal Music Group
UMG's headquarters in Santa Monica, California
|Headquarters||Santa Monica, California, US|
(Chairman & CEO) (2011-)
|Products||Music and entertainment|
|Revenue||$6.8 billion (2017)|
Number of employees
|Divisions||List of Universal Music Group labels|
Universal Music Group (also known in the United States as UMG Recordings, Inc. and abbreviated as UMG) is an American global music corporation that is a subsidiary of the French media conglomerate Vivendi. UMG's global corporate headquarters are located in Santa Monica, California. It is considered one of the "Big Three" music companies, along with Sony Music and Warner Music Group. Since 2004, the corporation is no longer related to the film studio Universal Studios. UMG has signed licensing agreements with more than 400 platforms worldwide.
- 1 History
- 2 Labels
- 3 VEVO
- 4 Locations
- 5 Criticism and controversies
- 6 See also
- 7 References
- 8 External links
Universal Music was once the record company attached to film studio Universal Pictures. The company's origins go back to the formation of the American branch of Decca Records in September 1934. The Decca Record Co. Ltd. of England spun American Decca off in 1939. MCA Inc. merged with American Decca in 1962.
In November 1990, Japanese multinational conglomerate Matsushita Electric agreed to acquire MCA for $6.59 billion. In 1995, Seagram acquired 80 percent of MCA from Matsushita. On December 9, 1996, the company was renamed Universal Studios, Inc., and its music division was renamed Universal Music Group; MCA Records continued as a label within the Universal Music Group. In May 1998, Seagram purchased PolyGram and merged it with Universal Music Group in early 1999.
With the 2004 acquisition of Universal Studios by General Electric and merging with GE's NBC, Universal Music Group was cast under separate management from the eponymous film studio. This is the second time a music company has done so, the first being the separation of Time Warner and Warner Music Group. In February 2006, the label became 100 percent owned by French media conglomerate Vivendi when Vivendi purchased the last 20 percent from Matsushita. On June 25, 2007, Vivendi completed its €1.63 billion ($2.4 billion) purchase of BMG Music Publishing, after receiving European Union regulatory approval, having announced the acquisition on September 6, 2006.
2007-2012 and EMI purchase
In June 2007, UMG acquired Sanctuary, which eventually became UMG's entertainment merchandising and brand management division, Bravado. The company represents artists such as Justin Bieber, Lady Gaga, and Kanye West, and has partnered with retailers including Barneys, Bloomingdale's and Selfridges.
With Lucian Grainge's appointment as CEO at UMG, Max Hole was promoted to COO of UMGI, effective July 1, 2010.
Doug Morris stepped down from his position as CEO on January 1, 2011. Former chairman/CEO of Universal Music International Lucian Grainge was promoted to CEO of the company. Grainge later replaced him as chairman on March 9, 2011. Morris became the next chairman of Sony Music Entertainment on July 1, 2011. With Grainge's appointment as CEO at UMG, Max Hole was promoted to COO of UMGI, effective July 1, 2010. Starting in 2011 UMG's Interscope Geffen A&M Records began signing contestants from American Idol/Idol series. In January 2011, UMG announced it was donating 200,000 master recordings from the 1920s to 1940s to the Library of Congress for preservation.
In March 2011, Barry Weiss became chairman and CEO of The Island Def Jam Music Group and Universal Republic Records. Both companies were restructured under Weiss. In December 2011, David Foster was named Chairman of Verve Music Group.
In 2011, EMI agreed to sell its recorded music operations to Universal Music Group for £1.2 billion ($1.9 billion) and its music publishing operations to a Sony-led consortium for $2.2 billion. Among the other companies that had competed for the recorded music business was Warner Music Group which was reported to have made a $2 billion bid. IMPALA opposed the merger. In March 2012, the European Union opened an investigation into the acquisition The EU asked rivals and consumer groups whether the deal would result in higher prices and shut out competitors.
On September 21, 2012, the sale of EMI to UMG was approved in Europe and the United States by the European Commission and Federal Trade Commission respectively. However, the European Commission approved the deal only under the condition the merged company divest one third of its total operations to other companies with a proven track record in the music industry. UMG divested Mute Records, Parlophone, Roxy Recordings, MPS Records, Cooperative Music, Now That's What I Call Music!, Jazzland, Universal Greece, Sanctuary Records, Chrysalis Records, EMI Classics, Virgin Classics, and EMI's European regional labels to comply with this condition. UMG retained The Beatles (formerly of Parlophone) and Robbie Williams (formerly of Chrysalis). The Beatles catalogue was transferred to UMG's newly formed Calderstone Productions , while Williams' catalogue was transferred to Island Records.
2012–2017: EMI integration and divisions reorganization
Universal Music Group completed their acquisition of EMI on September 28, 2012. In November 2012, Steve Barnett was appointed chairman and CEO of Capitol Music Group. He formerly served as COO of Columbia Records. In compliance the conditions of the European Commission after purchase of EMI, Universal Music Group sold the Mute catalogue to the German-based BMG Rights Management on December 22, 2012. Two months later, BMG acquired Sanctuary Records for €50 million.
On February 8, 2013, Warner Music Group acquired the Parlophone Label Group (consisting of Parlophone Records, Chrysalis Records, EMI Classics, Virgin Classics and EMI Records' Belgian, Czech, Danish, French, Norwegian, Portuguese, Spanish, Slovak and Swedish divisions) for $765 million (£487 million). Later in February, Sony Music Entertainment acquired Universal's European share in Now That's What I Call Music for approximately $60 million. Play It Again Sam acquired Co-Operative Music for £500,000 in March 2013. With EMI's absorption into Universal Music complete, its British operations consist of five label units: Island, Polydor, Decca, Virgin EMI and Capitol. In the Greek market, as part of its divesture plans, Universal Music retained Minos EMI and sold Universal Music Greece to Greek investors who renamed it Cobalt Music. Edel AG acquired the MPS catalogue from Universal in January 2014.
On March 20, 2013, UMG announced the worldwide extension of their exclusive distribution deal with the Disney Music Group, excluding Japan. As a result of this deal DMG's labels and artists have access to UMG's roster of producers and songwriters on a worldwide basis. The exclusive deal also saw UMG granted unlimited access to all rights pertaining to Disney's 85-year back catalog of soundtracks and albums.
On April 2, 2013, the gospel music divisions of Motown Records and EMI merged to form a new label called Motown Gospel. In May 2013, Japanese company SoftBank offered $8.5 billion to Vivendi for the acquisition of UMG, but Vivendi rejected it. In July 2018, JPMorgan said that UMG could be worth as much as $40 billion and then increased the valuation to $50 billion in 2019.
In August 2013, UMG became the first company in the US to have nine of the Top 10 songs on the digital charts, according to SoundScan and weeks later, became the first company to hold all 10 of the Top 10 spots on the Billboard Hot 100 Chart.
On April 1, 2014, Universal Music announced the disbandment of Island Def Jam Music, one of four operational umbrella groups within Universal Music. Universal CEO Lucian Grainge said of the closure, "No matter how much we might work to build 'IDJ' as a brand, that brand could never be as powerful as each of IDJ's constituent parts." Island Records and Def Jam now operate as autonomous record labels. David Massey and Bartels, who worked respectively at Island and Def Jam Records, were named to the new record labels independently. Barry Weiss, who previously moved from Sony Music to lead Island Def Jam Music in 2012 when Motown Records was incorporated into Island Def Jam, stepped down from Universal Music. Additionally, as part of the changes to the labels, Motown Records transferred to Los Angeles to become part of the Capitol Music Group and previous Vice President Ethiopia Habtemariam was promoted to Label President for Motown Records. Republic Records would operate independently while the Interscope Geffen A&M group remained unchanged.
Universal Music Group entered into film and TV production with the 2014 purchase of Eagle Rock Entertainment. UMG's first major film production was Amy, which won an Oscar for Best Documentary, while taking part in Kurt Cobain: Montage of Heck and The Beatles: Eight Days a Week documentaries. In January 2016, UMG hired David Blackman from Laurence Mark Production where he was president of production as head of film and television development and production, and theater producer Scott Landis as special advisor on theatrical development and production. UMG Executive Vice President Michele Anthony and Universal Music Publishing Group Chairman and CEO Jody Gerson have oversight of the pair. On February 11, 2017, PolyGram Entertainment was relaunched as a film and television unit of Universal Music Group under David Blackman. Vivendi and Red Bull GmbH combined StudioCanal, Universal Music Group and Terra Mater Film Studios in a co-development partnership for feature films in May 2017.
In 2015, UMG's Capitol Records earned all the major Grammy Awards for the year, with Sam Smith receiving Best New Artist, Record of the Year and Song of the Year awards and Beck winning Album of the Year.
In April of 2017, UMG signed a new multi-year licensing agreement with Spotify, the world's leading streaming service, and in May of 2017, UMG signed a deal with Tencent, China's biggest gaming and social media firm.
In July 2017, "Despacito" by Luis Fonsi, Daddy Yankee and featuring Justin Bieber, became the most streamed track of all time. By 2018, the song had broken several Guinness World Records, including Most Weeks at Number 1 on Billboard Hot Latin Songs chart and most-viewed video online.
In August 2017, UMG and Grace/Beyond agreed to develop three new music-based television series, 27, Melody Island and Mixtape. 27 would focus on musicians at the age of 27, an age at which several iconic musicians died. Melody Island was an animated series based on tropical island music with live craft segments. Mixtape had twelve episodes, with each episode connected to a song.
In October 2017, UMG announced the launch of its Accelerator Engagement Network, an initiative aimed to help develop music-based startups around the world.
In November 2017, USC Annenberg announced UMG's partnership in the "Annenberg Inclusion Initiative", becoming the first music company to do so. The initiative is meant to create change for representation of women and underrepresented racial and ethnic groups in the media industry.
In December 2017, Universal Music Group acquired the catalogues of Stiff Records and ZTT Records, along with Perfect Songs Publishing, from Trevor Horn's SPZ Group. That same month, UMG signed a global, multi-year agreement with Facebook becoming the first major music company to license its recorded music and publishing catalogs for video and other social experiences across Facebook, Instagram and Oculus. UMG also signed a multi-year licensing agreement with YouTube that month.
In June 2018, Universal Music Japan announced an exclusive license agreement with Disney Music Group. With the addition of Japan, UMG distributes releases from Disney Music Group globally.
In July, The Rolling Stones signed a worldwide agreement with UMG covering the band’s recorded music and audio-visual catalogues, archival support, global merchandising and brand management. That same month, Vivendi announced it would plan to sell up to half of Universal Music Group.
In Nielsen's 2018 US Music Mid-Year report, UMG made history with eight of the Top 10 artists, including all of the top five, as well as all of the top eight artists ranked by on-demand audio streams.
In August 2018, UMG announced a strategic expansion in Africa, opening an office in Abidjan to oversee French-speaking Africa, and also unveiling a Universal Music Nigera office in Lagos to focus on signing local artists and taking them global.
In December 2018, Queen's "Bohemian Rhapsody" became the most-streamed song from the pre-streaming era and the most-streamed classic rock song of all time.
On November 19, 2018, singer Taylor Swift signed a new multi-album deal with Universal Music Group. In addition to the promised ownership of her master recordings, UMG agreed to, in the event that it sells portions of its stake in Spotify, distribute proceeds among its artists and make them non-recoupable.
Copyright termination lawsuit
On February 5, 2019, John Waite and Joe Ely filed a class-action lawsuit against (UMG) claiming the company is violating their right to terminate grants of copyright after 35 years in accordance with copyright law of the United States by ignoring Notices of Termination. May 3, 2019, UMG filed a motion to dismiss the case, stating the Notices of Termination were not valid because the songs were not grants of copyright but works for hire.
Los Angeles metropolitan area
The UMG main global headquarters are located at 2220 Colorado Avenue in Santa Monica. The Santa Monica headquarters oversees its legal obligations in the US and Canada. Interscope-Geffen-A&M and Verve Music Group are based at its Los Angeles headquarters with John Janick heading Interscope-Geffen-A&M and David Foster heading Verve. Def Jam, Island and Republic Records has offices at the Santa Monica headquarters. The building is also home to Universal Music Enterprises (UME). UMG chairman & CEO Lucian Grainge works out of the company's Santa Monica headquarters. Universal Music Publishing is headquartered at 2100 Colorado Avenue.
New York City
Universal Music Spain is headquartered in Madrid, Spain in the neighborhood of Ciudad Lineal. Universal Music Spain was founded in 1998 and today is important for both Spanish and Latin American artists, and generally, global Spanish language music.
Universal Music Group Global (formerly known as Universal Music Group International (UMGI)) is headquartered in Kensington, London. Global manages UMG's offices in most countries outside of North America.
Universal Music Group‘s Universal Music Polska is located in Warsaw.
Universal Music Group's Universal Music Canada is located in Toronto, in a former building that was the previous home to the Canadian subsidiary of MCA Records since 1970.
Criticism and controversies
CD price fixing
Between 1995 and 2000, music companies were found to have used illegal marketing agreements such as minimum advertised pricing to artificially inflate prices of compact discs in order to end price wars by discounters such as Best Buy and Target in the early 1990s. A settlement in 2002 included the music publishers and distributors; Sony Music, Warner Music, Bertelsmann Music Group, EMI Music and Universal Music Group. In restitution for price fixing they agreed to pay a $67.4 million fine and distribute $75.7 million in CDs to public and non-profit groups but admitted no wrongdoing. It is estimated suppliers/customers were overcharged by nearly $500 million and up to $5 per album which conflicts with proof of sale and purchase interests.
In May 2006, an investigation led by then New York Attorney General, Eliot Spitzer, concluded with a determination that Universal Music Group bribed radio stations to play songs from Ashlee Simpson, Brian McKnight, Big Tymers, Nick Lachey, Lindsay Lohan and other performers under Universal labels. The company paid $12 million to the state in settlement.
In May 2007, UMG was accused of abusing the Digital Millennium Copyright Act in order to quell criticism, by forcing YouTube to remove several videos which contained UMG's music. Eventually, UMG retracted its claims after being challenged by the Electronic Frontier Foundation. In the same year, UMG was accused of using the Digital Millennium Copyright Act to indiscriminately remove content related to the artist Prince, most notably a twenty-nine-second home video in which a child danced to one of Prince's songs. In April 2016, UMG had the audio muted of a video clip showing Katherine Jenkins singing the British national anthem. They claimed that "God Save the Queen" was a copyrighted song, and YouTube initially complied with this request, but later allowed the video to be viewed with the original audio track.
In December 2007, UMG announced a deal with Imeem which allows users of the social network to listen to any track from Universal's catalogue for free with a portion of the advertising generated by the music being shared with the record label. Two weeks after the deal was announced Michael Robertson speculated on the secret terms of the deal and argued that ultimately this was a bad deal for imeem. This speculation lead to a flame war on the Pho digital media email list as imeem representatives denied his claims and dismissed his theories as unfounded. All traffic was redirected to MySpace after the company acquired Imeem on December 8, 2009.
On December 9, 2011, Megaupload published a music video titled: "The Mega Song", showing artists including Kanye West, Snoop Dogg, Alicia Keys and will.i.am endorsing the company. The music video was also uploaded to YouTube, but was removed following a takedown request by UMG. Megaupload said that the video contained no infringing content, commenting: "we have signed agreements with every featured artist for this campaign". Megaupload requested an apology from UMG, and filed a lawsuit against the company in the United States District Court for the Northern District of California, on December 12, 2011. UMG denied that the takedown was ordered under the terms of the Digital Millennium Copyright Act, and said that the takedown was "pursuant to the UMG-YouTube agreement," which gives UMG "the right to block or remove user-posted videos through YouTube's CMS (Content Management System) based on a number of contractually specified criteria." The video was subsequently returned to YouTube, with the reasons for the UMG takedown remaining unclear. Lawyers for will.i.am initially claimed that he had never agreed to the project, and on December 12, he denied any involvement in the takedown notice.
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