UMG's next artist-centric step is 'superfan experiences and products'

Universal Music Group chief Sir Lucian Grainge has sent his annual new year’s note to staff at the major label with encouragement for the year ahead.

There is usually a strong news line. For example, in January 2023 Grainge declared that “the economic model for streaming needs to evolve” and signified UMG’s push for ‘artist-centric’ payouts.

Deezer would become the first streaming service to devise such a model with the label group later in the year. So what does Grainge’s 2024 memo tell us about UMG’s plans and priorities over the coming 12 months?

He started by celebrating the progress made with that new streaming model.

“I’m proud to say that in just a matter of months, several global platforms, including the world’s largest music platform, have already adopted artist-centric principles that will transform the way artists are compensated for their work,” wrote Grainge.

“In the coming months, I believe you will see more platforms adopting these principles. Why? Because it is the right thing to do both for artists and for the wider music ecosystem.”

“As this new model becomes widespread, the impact will be profound: a healthier, more equitable and more vibrant music ecosystem that rewards all artists—be they major, indie or DIY—at all stages of their careers.”

Grainge also addressed one of UMG’s other key policy issues from 2023 that remains a hot topic for 2024: generative AI technologies and the regulations around them.

“Early on in 2023, many ‘experts’ viewed AI as a looming threat. Our view? Just as we had done with so many other previous proclamations of doom, we rejected that short-sighted appraisal. On the contrary, we saw AI as presenting opportunities. And then, just as we did with streaming, we went out to turn those opportunities into reality,” wrote the UMG boss.

Grainge cited his company’s lobbying efforts calling for ‘guardrails’ for AI, and also its partnerships with YouTube, Endel and BandLab to explore AI’s creative potential.

The memo also highlighted UMG’s push into the health sector; its charitable and wellbeing efforts and its work tackling the climate emergency, while also listing UMG’s key musical achievements from 2023.

Highlights: It had six of the top 10 global artists on Spotify; 13 of the top 20 songs globally on Apple Music; the three top artists on Deezer; three of the top five songs on YouTube; and the top two artists and three of the top five songs and albums on Amazon Music. Taylor Swift, The Weeknd and Morgan Wallen loom large in all this.

So, what’s in store for 2024?

“Our pioneering artist-centric strategy will extend its reach. We first focused on a fairer way to allocate the streaming pie among real artists by addressing fraud and other aspects that deprive artists of their just compensation,” wrote Grainge.

“The next focus of our strategy will be to grow the pie for all artists, by strengthening the artist-fan relationship through superfan experiences and products. We are already in advanced discussions with our platform partners regarding this phase and will have more to announce in the coming months.”

Grainge also said that UMG plans to invest more in its in-house tools for artists to “create experiential, commerce and content offerings for their fans” which he described as “the blueprint for the labels of the future”.

He promised more lobbying to protect artists from “unethical uses” of AI, while also teasing the announcement of “more real-world commercial applications for artist-driven, ethical AI”, and hinted at some corporate reorganisation ahead.

“In 2024, as we continue our industry-leading investments in A&R and artist development, we will further evolve our organizational structure to create efficiencies in other areas of the business, so we can remain nimble and responsive to opportunities as they arise, while also taking advantage of the benefits of our scale,” was how he put that.