Universal Music Group (UMG) has made the headlines quite a bit this month.
Let me refresh your memory.
Ongoing battle with TikTok
Majority Investment in Mavins Records
Label Restructure - including large-scale layoffs
This was all in February.
So what in the world is going on?
TikTok:
For TikTok to host songs on the app, they gotta partner with the individuals or entities that own the music. Unsurprisingly, major record labels and music publishers have inked massive licensing deals with TikTok.
Yet, at the end of January 2024, UMG and TikTok began vocalizing this tension that has clearly been building for a while.
Their licensing agreement was soon to expire, and UMG wanted to renegotiate the terms.
On January 30, 2024, UMG released an “Open Letter to the Artist and Songwriter Community”. They announced a “time out on TikTok”. Please read it when you get a chance.
To summarize:
UMG stated its mission: “to help our artists and songwriters attain their greatest creative and commercial potential.” with an emphasis on partnerships that offer fair compensation.
During contract renegotiation discussions, UMG pushed three main issues:
appropriate compensation
protection against harm from artificial intelligence
online safety for TikTok users.
UMG claims that TikTok met these three issues with indifference and intimidation.
The intimidation was in the form of “selectively removing the music of certain [UMG] developing artists while keeping … [UMG’S] audience-driving global stars.”
TikTok kept their response pretty simple. They attributed this conflict to UMG’s greed, claiming their opposition's stance was a false narrative.
Each party is pointing out that “other labels” or “other social media platforms” have reached an agreement.
UMG says it is taking a stance to set the precedent for the music industry as a whole.
Shortly after these press releases, TikTok began removing songs by UMG artists from their platforms. The issue? There are A LOT of songs by UMG artists.
Even worse, this dispute includes Universal Music Publishing Group (UPMG). UMG’s catalog consists of approximately 3 million songs. UPMG has about 4 million songs. Yup. That’s a lot of music.
This “hold” affects artists who aren’t even signed to UMG or UPMG. Any song that has been co-written by a UPMG artist is off the table.
Content creators are also affected. Any TikTok videos using those songs have been or will be muted.
That is tough! It seems like non-players are more affected by this dispute than the big dogs. It feels like two rich brothers are fighting and their kids have to deal with the consequences of not being able to hang out anymore.
The claim on both sides is a push for fairness in the best interest of the artists, songwriters, and users. Who’s telling the truth?
Both UMG and TikTok argue that this break-up will NOT have dire effects on their bottom line. So we will see what brings them back to agreeable terms.
2. ) Mavins Records
On February 26, I saw the announcement that UMG acquired a majority stake in Mavins Records. Mavins Records, one of the most successful Nigerian record labels - promoting Afrobeats and more – will apparently maintain control over all creative strategy.
The record label, run by Don Jazzy and Tega Oghenejobo, is home to Rema, Ayra Starr, and many others. It was once home to Tiwa Savage, who actually left in 2019 to sign with UMG!
Apparently, the ink to this UMG-Mavins deal is set to dry in the fall.
Although I’m sure the timing just collided perfectly for them, this felt like a power move from UMG. Acquiring such a large stake in Mavins adds insult to injury. In fact, UMG has had a few global acquisitions and partnerships this month alone. They’ve been involved with Chord Music, DGMC (in the United Arab Emirates), and EMI Records in the Philippines.
Is it UMG vs. the world? Or is UMG taking over the world?
3.) Company "Re-Design"
On February 29th, Universal Music Group confirmed that it will be redesigning its structure. Part of that includes $271 million in cuts by 2026.
I’ll give you a second to guess what’s getting cut…..
JOBS. ... amongst other things
The layoffs that started in tech a while back are trickling into music even more. We saw this with music journalism. Now record label employees are experiencing the same.
However, UMG has not presented this “headcount reduction” as a failure. Instead, it has been described as a mission to get the label closer to efficiency rates and goals set in 2020. Unfortunately, UMG states that hiring new employees was contrary to the goals they initially set.
UMG seems to be very confident about its restructuring. According to UMG CEO and Chairman, “[UMG] is creating the blueprint to the music company and the labels of the future”.
One strategy is harnessing the label’s resources into their “highest performing internal teams and resources.” Those teams are creative A&R and marketing & analytics.
These changes are happening very fast, but it seems that UMG has been preparing these moves for a long time. Their vision is clear, but we have to see how the story unfolds.
I’m going to keep my OPINIONS for another post. I just wanted to let y’all know what’s going on!
Sincerely,
Latifah
Sources:
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