Universal Music CEO Touts Streaming 2.0 Deals With Spotify, Amazon: “Where They Go, We Go With Them”

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Lucian Grainge, the CEO of Universal Music Group, anticipates expansion for his company and similar major labels in the future through strategic collaborations with leading streaming services.

Following the announcement of UMG’s fourth-quarter earnings, Grainge explained to financial analysts that the era of the music industry being crippled by piracy, copyright infringements, and ownership disputes has transitioned into a period characterized by collaborations with leading global music streaming services such as Amazon, Apple, and Spotify.

Grainge stated during a call with analysts that wherever they venture, we follow suit, working together closely, particularly in nurturing local talent,” he said. The head of UMG was delighted to announce fresh multi-year licensing agreements with Spotify and Amazon Music. “These partnerships offer new premium subscription options, combine music and non-music content, and expand the selection of enhanced audio and visual content that will be advantageous for artists, songwriters, platforms, and users alike.

These deals are integral components of Universal Music Group’s (UMG) Streaming 2.0 blueprint, a strategic approach designed to increase music streaming earnings by leveraging subscription services and exclusive content. Moreover, these partnerships will see them collaborating to combat illegal AI-generated music, copyright violations, and intellectual property infringements.

From October through December 31, 2024, Universal Music Group (UMG) experienced a 7.2% increase in total revenue, bringing it to €3.4 billion ($3.68 billion). Their adjusted EBITIDA also climbed by 18%, reaching €799 million ($862.4 million), compared to the previous year. The income from their recorded music division grew by 6% during the fourth quarter, amounting to €2.56 billion ($2.76 billion).

For the given quarter, the subscription and streaming income in that category increased by 4.6% to reach approximately €1.6 billion (US$1.79 billion). However, it’s worth noting that compared to the same period last year, the streaming revenue decreased by 5.1%. This decline is due to a shift in music demand towards less profitable short-form video platforms rather than more lucrative video streaming services.

Boyd Muir, UMG’s COO and CFO, informed analysts that while there is a chance for enhanced short-term video monetization for platforms in the mid-term, he anticipates ongoing strain on this revenue stream in the near term.

As a passionate fan, I found myself pondering over the queries posed to UMG executives during our recent conversation. The focus was centered around their strategies for sustaining financial growth in the future, especially considering the growing dependence on music streaming platforms across various geographical markets, each with its distinct audience and content offerings.

Grainge emphasized that it’s our music’s appeal, our libraries, catalog, and global influence that allow us to establish the necessary ecosystem. Meanwhile, Michael Nash, as executive VP and chief digital officer, discussed combining products and leveraging technology like Amazon’s Alexa to increase overall earnings.”

“Grainge pointed out that our music, libraries, catalog, and global presence are what enable us to construct the ecosystem. In contrast, Nash, as executive VP and chief digital officer, discussed offering multiple products together and utilizing technology like Amazon’s Alexa to boost profits.

Nash emphasized that ongoing innovation has significantly reshaped our company and digital environments over the past ten years, and he expects this trend to persist as the market expands.

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2025-03-06 22:25