21
Annual Report -
2013
-
Vivendi
Group Profile |
Businesses
| Litigation | Risk Factors
1
Universal Music Group
2.2.
Universal Music Group
2.2.1.
Strategy / Positioning
The recorded music business discovers and develops recording artists,
and then markets and promotes their music across a wide array of
formats and platforms. UMG also continues to expand its activities
in other areas related to recording artists, such as brand rights
management and sponsorship.
The music publishing business discovers and develops songwriters, and
owns and administers the copyright for musical compositions for use
in recordings, public performances and related uses, such as films and
advertisements.
The merchandising business produces and sells artist-branded and other
branded products via multiple sales points, including fashion retail,
concert touring and the Internet.
2.2.2.
Recorded Music
UMG’s recorded music business, which features a rich content portfolio,
a diverse range of labels in the major markets and direct representation
in approximately 60 countries across the globe, has a global market
share of more than 30% and holds market-leading positions in most of
the world’s major music markets, including the United States, the United
Kingdom, France and Germany.
In September 2012, UMG completed the acquisition of EMI Recorded
Music, strengthening its position in the recorded music market. With
this acquisition, UMG adds to its catalog iconic artists such as the
Beatles, the Beach Boys, and Robbie Williams, as well as internationally
renowned artists such as Katy Perry, Emeli Sandé, Lady Antebellum,
Lorde and Imagine Dragons. In July 2013, as part of its receipt of final
European regulatory approval, UMG successfully sold the Parlophone
Label Group to Warner Music Group for €591 million.
With its international reach, UMG successfully participates in
the local music markets essential to music companies. In most
countries, domestic artists account for the majority of UMG’s roster.
This broad portfolio also minimizes dependence on any particular artist
or music trend.
For those countries that have not traditionally been major markets for
recorded music, such as the BRIC countries (Brazil, Russia, India and
China), Latin America, Africa, the Middle East and Eastern Europe, UMG
is developing innovative new business models for digital and mobile
platforms and using commercial partners to increase fans’ access to
music. By utilizing these partnerships and brand networks, UMG makes
its content legally available in countries where historically music
availability is very limited or non-existent.
UMG’s diverse range of labels assures the business’ success, even
as consumer tastes evolve. UMG’s major recording labels include
everything from popular music labels (such as Capitol Music Group,
Island Def Jam Music Group, Interscope Geffen A&M, Universal Music
Group Nashville, Polydor and Universal Motown Republic Group) to
classical and jazz labels (such as Blue Note Records, Decca, Deutsche
Grammophon and Verve).
In 2013, UMG’s best-selling albums included titles from a wide range of
artists, including not only global best-selling established acts such as
Eminem, Katy Perry, Lady Gaga, Drake, and Robbie Williams, but also
emerging talents such as Imagine Dragons, Lorde, Florida Georgia Line
and Luke Bryan, as well as regional bestsellers such as Stromae and
Florent Pagny in France, Santiano and Helen Fischer in Germany, and
Paula Fernandes in Brazil.
Sales from prior releases significantly augment UMG’s recorded music
revenues each year, and UMG benefits from its ownership of the most
comprehensive catalog of recorded music in the world. The catalog
includes a wide array of performers from around the world, including,
among others, ABBA, Louis Armstrong, Dire Straits, Serge Gainsbourg,
The Beatles, The Beach Boys, Johnny Hallyday, Elton John, Herbert von
Karajan, Edith Piaf, The Rolling Stones, Queen and Frank Sinatra.
UMG markets its recordings and promotes its artists through a variety
of activities, including advertising and exposure in magazines, on radio
and TV, via the Internet and mobile phone devices and through point-
of-sale material, as well as by public appearances and performances.
TV advertising plays an important role in the marketing of compilations
and new albums. While global priorities and strategies for a number of
artists are determined centrally, the majority of marketing activities are
country-specific.
UMG is also extremely active in developing new sources of revenue,
including through advertising and sponsorship agreements, and
participation of artists in theatrical, live and TV production, such as
through “The Voice”, which has local productions in 55 countries
and is on air in 160 countries, and promotes local talent and creates
a local and global platform. Universal Music & Brands develops local
and multiterritory brand partnerships with a diversified customer
base, including Hewlett-Packard, Credit Suisse, GVT, Commerzbank
and Coca Cola.
UMG plays a leading role in the expansion of the digital music market
and continues to encourage and support innovation through partnerships
with the leading players in the market, including Spotify, iTunes, Google
and Vevo.
UMG has outsourced the bulk of its manufacturing operations and the
management of its distribution activities to third parties.
Universal Music Group (UMG) is the world’s leading music company
with three main operating divisions: recorded music, music publishing
and merchandising.
