Welcome to Music Business Worldwide’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
It was another week dominated by news centered on Universal Music Group, and not only on its licensing feud with TikTok (although, yes, that did play a role).
In yet another sign that Afrobeats has become a major global phenomenon, UMG acquired a majority stake in Lagos-headquartered Mavin Global, a label credited with bringing many Afrobeats artists to global prominence.
A few days later, UMG confirmed its plans for a “re-design” of its organizational structure, which will include layoffs and save the company some $270 million by the end of 2026, all of it going towards EBITDA.
Meanwhile, UMG’s spat with TikTok appeared to escalate this week, as TikTok began removing UMG’s publishing catalog days before the license expired (as opposed to UMG’s recordings catalog, which started disappearing from the platform over the past month).
On UMG’s latest earnings call, comments from UMG Chairman and CEO Sir Lucian Grainge and EVP/Chief Digital Officer Michael Nash didn’t suggest the possibility of a quick resolution, with Grainge asserting that “there must not be a free ride” for TikTok, and Nash indicating that a shift of consumers from TikTok to other platforms would benefit UMG financially.
UMG also reported that it generated revenues of EUR €11.108 billion in FY 2023 across all of its divisions (including recorded music, publishing and more). That FY revenue figure was up 11.1%YoY at constant currency, and converts to USD $12.011 billion at the average annual exchange rate published by the European Central Bank.
Finally, in non-Universal news (and in another sign that the majors are getting serious about monetizing superfans), Warner Music Group CEO Robert Kyncl announced during an appearance at a conference in Doha, Qatar, that WMG is working on a “superfan app.”
Universal Music Group (UMG) has acquired a majority stake in Lagos, Nigeria-based music company Mavin Global (Mavin).
UMG describes Mavin as “the driving force behind many of the continent’s Afrobeats artists”.
Founded in 2012 by artist, producer, music executive and entrepreneur, Michael Collins Ajereh (aka Don Jazzy), Mavin has played a prominent role in breaking Afrobeats artists within Africa, and globally.
According to UMG, Mavin will “maintain autonomy” over its strategy and future talent development. As part of the agreement, founder and CEO Don Jazzy and COO Tega Oghenejobo will continue leading the company.
The deal remains subject to regulatory approval and is expected to close by the end of Q3 2024…
The battle between TikTok and Universal Music Group just entered a significant new phase.
TikTok confirmed on February 27 that it’s already begun removing Universal Music Publishing Group (UMPG) songs from its platform – three whole days before the UMPG catalog becomes unlicensed for use on TikTok.
As if you need to be reminded, UMG’s distributed recordings catalog (comprised of around 3 million tracks) became unlicensed for use on TikTok on February 1 after UMG’s agreement with the ByteDance-owned platform expired very publicly on January 31, 2024.
Megahits by UMG-affiliated megastars including Taylor Swift, Olivia Rodrigo, Billie Eilish, and more have gone quiet on TikTok over the past few weeks as a result of that copyrighted content being removed…
“He’s got my number… call us! They know where we are. Stop talking on the f*****g internet and let’s see what you’ve got to say.”
Sir Lucian Grainge did not say this about TikTok CEO, Shou Zi Chew today. It’s actually a comment from Noel Gallagher about his brother’s hopes for an Oasis reunion.
But what Grainge did say about UMG’s escalating licensing spat with TikTok, on Universal’s Q4 2023 earnings call this week, wasn’t a million miles away.
Grainge was asked by Guggenheim analyst Michael Morris whether UMG and TikTok were getting closer, or further away, from a renewed licensing deal that would satisfy UMG’s infamous concerns over the current terms being offered by ByteDance.
“Specifically [on the subject of] TikTok… we’re friendly people,” said the UMG boss. “My phone is open, unfortunately, 24 hours a day. We hope that we will be able to find solutions.”
Right now, however, those “solutions” don’t look likely to arrive anytime soon…
Universal Music Group confirmed on February 28 the details of a “re-designing” of its organizational structure, which it says will generate EUR €250 million (USD $270 million) in annual cost savings.
UMG says this “redesign” – which includes “headcount reduction”, aka layoffs – will result in €75 million ($81 million) of cost-savings in 2024 (vs. 2023).
Those annual cost savings (vs. 2023) will then expand to €125 million in 2025, before eventually reaching €250 million by the end of 2026.
UMG says all of these annual run-rate savings will be “accretive to EBITDA” – i.e. will directly improve the company’s profit margins.
In a note to investors on Wednesday, UMG said that it will achieve its €250 million annual cost-savings target via “a combination of headcount reduction and other operational efficiencies”…
On Tuesday (February 27), Warner Music Group CEO Robert Kyncl appeared at the Web Summit tech conference in Doha, Qatar.
Kyncl took part in a session titled ‘The artist, the CEO, and the future of music’ and was joined onstage by actress and singer, Nora Fatehi – who’s reported to be the most-followed Moroccan artist in the world, and who has just signed a global recordings deal with Warner Music Group.
Nora Fatehi is also a major Bollywood star, and was the first Arab-African artist to hit one billion views with a single music video on YouTube.
During the discussion, Kyncl and Fatehi talked about developments around artificial intelligence, the value of a record label, and the role that technology will play in the music industry in the future.
Kyncl also revealed that WMG is building its own ‘superfan app‘…
