Careers at Universal Music Group
Universal Music Group’s (“UMG”) mission is to identify and develop recording artists and songwriters, and produce, distribute and promote the most critically acclaimed and commercially successful music to delight and entertain fans around the world.
Universal Music Group Inc. is a subsidiary of Vivendi Inc.
- Recorded Music – UMG discovers and develops artists and handles the marketing, distribution, sales and licensing of the content created by these artists. With the most comprehensive recorded music catalogue in the world, UMG has a global market share of more than 30% in the recorded music business, with leading positions in key markets such as the US, the UK, France, and Germany. While physical sales are ongoing, UMG has been at the forefront of adopting alternative distribution mediums, including online sales and digital streaming. For the latter, it works closely with streaming providers such as Spotify, Apple, Deezer, Amazon, Google, and Vevo.
- Music Publishing – Universal Music Publishing Group, (“UMPG”) a subsidiary of UMG, acquires rights to music compositions and licenses the right to use these compositions in sound recordings, films, television, advertisements, other performances, printed sheet music, and song portfolios. With a music catalogue that includes over 3 million owned and administered titles, UMPG is the second largest music publishing company globally.
- Merchandising – Bravado, a subsidiary of UMG, works with clients to create merchandise tailored to each artist or brand – these products are sold on live tours and through physical and online retail channels. It also licenses the right to do the same to other third parties globally. Bravado is the only global, full-service merchandising company in the industry.
- Partnerships & Brands – UMG also develops its revenue through advertising and sponsorship agreements with corporate partners. It also supports live and TV productions, featuring its artists or discovering new artists through these channels. Through Universal Music & Brands, the group also explores alternative revenue streams, including brand consulting and strategic solutions.
UMG started off as MCA Music Entertainment Group, a subsidiary of MCA Inc. – MCA standing for Music Corporation of America. MCA Inc. was an American media company with businesses in music, film, and television and is the predecessor of a number of well-known companies today, including Universal Studios.
In 1995, 80% of MCA Inc. was acquired by Seagram Company Ltd. MCA changed its name to Universal Studios the following year, and its subsidiary, MCA Music Entertainment Group, changed its name to the Universal Music Group that we know today.
Seagram, then the owner of Universal Studios, bought another music giant in 1998 - PolyGram, the owner of Decca (UK) – merging it with UMG. Seagram then sold its media holdings, including Universal Studios (the then parent of UMG), to Vivendi, which became Vivendi Universal. Vivendi Universal later sold off most of its entertainment business, including Universal Pictures but not including UMG, to General Electric. It then renamed itself Vivendi.
UMG bought over EMI’s recorded music business in a $1.9 billion deal in November 2011. This deal came with it the requirement for UMG to divest a third of its total operations – a condition for regulatory approval of the merger.
Business model of Universal Music Group
UMG has a mass market business model, with a multi-sided market. It mainly splits up its businesses by function and by geography.
Geography – UMG invests heavily in its local operations globally, allowing it to tailor its approach to different markets. This approach has proven to be effective, with over 65% of sales coming from homegrown artists in their own country.
Business Function – UMG splits up its business according to function – recorded music, publishing, merchandising, and partnership & branding. Each of these functions has a different customer base.
- Recorded music appeals to the average music consumer, with different genres and distribution mediums being targeted at different consumer groups. For example, pop music and internet distribution would be targeted at youth, while jazz and physical mediums may be targeted more at middle-aged consumers.
- Publishing appeals to both the new artist and to a certain type of consumer, depending on the artist and the genre.
- Merchandising appeals to persons who attend live concerts, or die-hard fans. This would apply to certain consumer age groups as well, presumably younger consumers.
- Partnerships & Branding appeals primarily to other businesses who can see a marketing opportunity through tie-ups with popular artists.
UMG’s value proposition depends on the business function and the target customer. For the average consumer, its value is being a recognized and trusted music brand with the largest music catalogue in the world – a UMG label is a symbol of excellence in this regard.
For the artist, working with UMG is also a mark of excellence – being discovered by such a large company is valuable in and of itself, over and above the unparalleled resources that the company can provide.
For the business, the fact that an artist is signed up with UMG indicates that the artist has some degree of “star power” that can be leveraged on for marketing purposes.
UMG utilizes both direct sales and partnerships with third parties, depending on the business function.
Recorded music relies primarily on retail sales, licensing, and alternative revenue streams. Retail sales are done through music labels such as Capitol Music Group. Records are sold in physical store, through authorized resellers, or online, either directly or through resellers. Licensing is generally done directly from business to business, and includes licenses to use UMG’s music on radio, television, digital channels, social media and live appearances. Alternative revenue streams such as brand consulting and strategic solutions are also generally done directly business to business.
Publishing generally relies on licensing revenue, which is done business to business.
Merchandising relies primarily on retail sales, usually through retailers, and licensing, which is generally done directly business to business.
Partnerships & Branding are generally done directly business to business.
UMG relies heavily on culture-driven aspects of its product, i.e. its branding and reputation, in order to sell its music to retail consumers, to attract partners and artists, and to publish its material. They also create communities of businesses through which profitable partnerships may be formed.
UMG also invests heavily in emerging technologies, particularly in the dissemination of music, i.e. through direct online sales and through streaming services.
UMG’s key activity is the production and distribution of music – all of its other businesses are ancillary to this core purpose.
UMG’s key partners very widely in type, depending on the business function.
Recorded music relies heavily on retail sales licensing, and alternative revenue streams. Thus its key partners here would be: (a) distributors and resellers, both online and physical; (b) artists and artist organisations; (c) other music businesses (for the purposes of consulting and tie-ups); and (d) other media companies (for licensing revenue).
Publishing generally relies on licensing revenue. The key partners here would be media companies that are interested in using UMG’s intellectual property.
Merchandising relies primarily on retail sales, usually through retailers, and licensing. Key partners would be physical resellers, event companies, and merchandising companies (for licensing revenue).
Partnerships & Branding are generally done directly business to business. Key partners would be any business, from airlines to banks, that is interested in sponsorship and advertising.
UMG’s key resources are human resources, i.e. the pool of artists and media management talent that are tied to the business, and intellectual property, i.e. its music catalogue.
While exact figures are not published and are thus unavailable, UMG’s key costs are:
Production costs – manufacturing and distribution costs, royalty and copyright expenses, artists’ costs, recording costs, and direct overheads)
Selling, general and administrative expenses (SG&A) – marketing and advertising expenses, selling costs, provisions for doubtful receivables, indirect overheads, salaries and employee benefits, rent, consulting and service fees, insurance costs, travel and entertainment expenses, administrative department costs, provisions for receivables and other operating expenses).
UMG’s key revenue streams are from physical sales, digital sales, and licensing. The former two are done exclusively by the Recorded Music segment, while the latter, licensing, is carried out by all the business segments.
|Source of Revenue||Revenue (FY 2015, million euros)||Percentage of Total Revenue|
Of which streaming and subscriptions
Licenses and others
|Merchandising and other||276||5.4%|
|Elimination of intersegment transactions||(37)||(0.07%)|
info: Lucian holds an honorary doctor of music degree from the Berklee College of Music. He has spent his entire career in the music industry, first setting up PolyGram Music publishing in 1986. He joined Polydor in 1993, rising to become its MD in 1997. He then joined Universal Music, becoming its Chairman and CEO in 2001. In 2011 he was named CEO and Chaiman of UMG International, leading UMG’s merger with EMI in that same year.
info: Michele holds a degree from The George Washington University and a JD from the University of Southern California. She oversees the UMG’s US Commercial Services Division and is in charge of UMG’s global brand partnerships, the company’s Canadian operations, Universal Music Enterprises, and is co-leading the development of UMG’s film, television and theatrical projects. She was the President and CEO of Sony Music Label Group US and, before that role, was a partner in the entertainment law firm Manatt, Phelps, Rothenberg & Phillips.
info: Frank is responsible for UMG’s operations in Germany, Austria, Italy, Switzerland, Benelux, the Scandinavian Countries, Eastern Europe and Western Balkans, as well as the Deutsche Grammophon label. He was an SVP in BMG prior to joining UMG. He is a board member of the Federal Association of the Music Industry, a member of the advisory board for East of Deutsche Bank, Betterplace.org and member of the board of trustees C/O Berlin.
info: Jody oversees all the global activities of UMPG. She served as the Co-President of Sony/ATV Music Publishing prior to joining UMG.
info: David oversees the company’s divisions in UK and Ireland. He was the MD and, later, co-president of Polydor. Prior to this he was the Head of Artist Development at RCA.
info: Boyd oversees UMG’s global finance operations, including asset management, information technology, accounting, supply chain, and human resources, and Bravado and Eagle Rock Entertainment. He was the head of internal audit in EMI.
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