Universal Music Group

Universal Music Group
Subsidiary
Industry Music & entertainment
Founded September 1934 (1934-09)
(as Decca Records USA)
1989 (1989) (as MCA Music Entertainment Group)
1996 (1996) (first UMG incarnation from MCA Records)
May 1998 (1998-05) (second UMG incarnation from PolyGram)
Headquarters Santa Monica, California, U.S.
Key people
 Lucian Grainge (Chairman & CEO)
Boyd Muir (CFO)
Revenue Increase$1.552 billion (2012)
Number of employees
 6,967 (2010)
Parent Vivendi
Divisions List of Universal Music Group labels
Subsidiaries PolyGram Entertainment
Website universalmusic.com

Universal Music Group (also known in the United States as UMG Recordings, Inc. and abbreviated as UMG) is an American global music corporation that is a subsidiary of the French media conglomerate Vivendi. UMG's global corporate headquarters are in Santa Monica, California. It is considered one of the "Big Three" record labels, along with Sony Music and Warner Music Group.

History

Early history

Universal Music was once the record company attached to film studio Universal Pictures. Its origins go back to the formation of the American branch of Decca Records in September 1934.[1][2] The Decca Record Co. Ltd. of England spun American Decca off in 1939.[3] MCA Inc. merged with American Decca in 1962. The present organization was formed when its parent company Seagram purchased PolyGram in May 1998 and merged it with Universal Music Group in early 1999. However, the name had first appeared in 1996 when MCA Music Entertainment Group was renamed Universal Music Group. The PolyGram acquisition included Deutsche Grammophon which traces its ancestry to Berliner Gramophone making Deutsche Grammophon UMG's oldest unit. UMG's Canadian unit traces its ancestry to a Berliner Gramophone breakaway firm the Compo Company.

Acquisition by Vivendi

With the 2004 acquisition of Universal Studios by General Electric and merging with GE's NBC, Universal Music Group was cast under separate management from the eponymous film studio. This is the second time a music company has done so, the first being the separation of Time Warner and Warner Music Group. In February 2006, the label became 100% owned by French media conglomerate Vivendi when Vivendi purchased the last 20% from Matsushita (renamed as Panasonic Corporation in 2008), the group's sole owner from 1990 to 1995 and co-owner from 1995 to 2006. On June 25, 2007, Vivendi completed its €1.63 billion ($2.4 billion) purchase of BMG Music Publishing, after receiving European Union regulatory approval, having announced the acquisition on September 6, 2006.[4][5]

2010s and EMI purchase

Doug Morris stepped down from his position as CEO on January 1, 2011. Former chairman/CEO of Universal Music International Lucian Grainge was promoted to CEO of the company. Grainge later replaced him as chairman on March 9, 2011.[6] Morris became the next chairman of Sony Music Entertainment on July 1, 2011.[7] With Grainge's appointment as CEO at UMG, Max Hole was promoted to COO of UMGI, effective July 1, 2010.[8] Starting in 2011 UMG's Interscope Geffen A&M Records will be signing contestants from American Idol/Idol series. On January 2011, UMG announced it was donating 200,000 master recordings from the 1920s to 1940s to the Library of Congress for preservation.[9]

In March 2011, Barry Weiss became chairman & CEO of The Island Def Jam Music Group & Universal Republic Records.[10] Both companies are restructuring under Weiss.[11] In December 2011, David Foster was named Chairman of Verve Music Group.

On November 12, 2011, it was announced EMI would sell its recorded music operations to Universal Music Group for £1.2 billion ($1.9 billion) and its music publishing operations to a Sony-led consortium for $2.2 billion.[12] Among the other companies that had competed for the recorded music business was Warner Music Group which was reported to have made a $2 billion bid.[13] However, IMPALA has said it would fight the merger.[14] In March 2012, the European Union opened an investigation into Universal's purchase of EMI's recorded music division[15] and has asked rivals and consumer groups whether the deal will result in higher prices and shut out competitors.[16] Coincidentally, UMG sister company StudioCanal has owned the EMI Films library for several years.

On September 21, 2012, the sale of EMI to UMG was approved in Europe and the United States by the European Commission and Federal Trade Commission respectively.[17] However, the European Commission approved the deal only under the condition the merged company divest one third of its total operations to other companies with "a proven track record in the music industry". UMG divested Mute Records, Parlophone, Roxy Recordings, MPS Records, Cooperative Music, Now That's What I Call Music!, Jazzland, Universal Greece, Sanctuary Records, Chrysalis Records, EMI Classics, Virgin Classics and EMI's European regional labels to comply with this condition. The Beatles' recorded music library was allowed to remain with UMG despite being considered part of Parlophone and is now managed by UMG's reorganized Capitol Music Group worldwide.[18][19] Robbie Williams, who had recorded for Chrysalis, had his catalogue transferred to Universal's Island Records.

2012–present: EMI integration and divisions reorganization

Universal Music Group completed their acquisition of EMI on September 28, 2012.[20] In November 2012, Steve Barnett was appointed chairman & CEO of Capitol Music Group. He formerly served as COO of Columbia Records.[21] In compliance the conditions of the European Commission after purchase of EMI, Universal Music Group sold the Mute catalogue to the German-based BMG Rights Management on December 22, 2012.[22] Two months later, BMG acquired Sanctuary Records for close to 50 million euros.[23]

On November 8, 2012, Universal Music and Hewlett-Packard launched a marketing operation: with a HP connected Music computer, the customer can access music from Universal artists, as well as exclusive content.[24]

On February 8, 2013, UMG sold to Warner Music Group the Parlophone Music Group consisting of Parlophone Records, Chrysalis Records, EMI Classics, Virgin Classics and EMI Records' Belgian, Czech, Danish, French, Norwegian, Portuguese, Spanish, Slovak and Swedish divisions, to a value of $765 million (£487 million).[25][26] Play It Again Sam acquired Co-Operative Music for £500,000 in March 2013.[27] The previous month, Sony Music Entertainment acquired Universal's European share in Now That's What I Call Music for approximately $60 million.[28] With EMI's absorption into Universal Music complete, its British operations will consist of five label units: Island, Polydor, Decca, Virgin EMI and Capitol.[29] Edel AG acquired the MPS catalogue from Universal in January 2014.[30]

On March 20, 2013, UMG announced the worldwide extension of their exclusive distribution deal with the Disney Music Group, excluding Japan and Russia. As a result of this deal DMG's labels and artists have access to UMG's roster of multiplatinum and Grammy Award-winning producers and songwriters on a worldwide basis.[31] The exclusive deal also saw UMG granted unlimited access to all rights pertaining to Disney's 85-year back catalog of soundtracks and albums.[32]

On April 2, 2013, the gospel music divisions of Motown Records and EMI merged to form a new label called Motown Gospel.[33] In May 2013, Japanese company SoftBank offered 8.5 billion US dollars to Vivendi for the acquisition of UMG, but Vivendi rejected it.[34] As of November 14, 2013, Universal Music will now distribute Warner Music Group's releases in the Middle East as a result of the integration of EMI's branch in the said region.[35]

On April 1, 2014, Universal Music announced the disbandment of Island Def Jam Music, one of four operational umbrella groups within Universal Music. Universal CEO Lucian Grainge said of the closure, "No matter how much we might work to build 'IDJ' as a brand, that brand could never be as powerful as each of IDJ's constituent parts."[36] Effective on the day of the announcement, Island Records and Def Jam will now operate as autonomous record labels. David Massey and Bartels, who worked respectively at Island and Def Jam Records, will lead the new record labels independently.[36] Barry Weiss who previously moved from Sony Music to head up Island Def Jam Music back in 2012 when Motown Records was incorporated into Island Def Jam has stepped down from Universal Music. Additionally, as part of the changes to the labels, Motown Records will be transferred to Los Angeles to become part of the Capitol Music Group—previous Vice President Ethiopia Habtemariam was promoted to Label President for Motown Records.[36] Republic Records now operates independently while the Interscope Geffen A&M group remains unchanged.[36]

Labels

Multimedia content delivery

Universal Music Group co-developed Vevo, a site designed for music videos inspired by Hulu.com, which similarly, will allow for free, ad-supported streaming of music videos and other music content.[37]

Locations

Los Angeles metropolitan area

Santa Monica

Universal Music Publishing Headquarters in Santa Monica, California.

The UMG main global headquarters are located at 2220 Colorado Avenue in Santa Monica. The Santa Monica headquarters oversees its legal obligations in the US and Canada such as Human Resources, and any legal issues surrounding the company. Interscope-Geffen-A&M and Verve Music Group are based at their LA headquarters with John Janick heading Interscope-Geffen-A&M[38] and David Foster heading Verve.[39] Def Jam, Island and Republic Records has some offices at the Santa Monica headquarters. The building is also home to Universal Music Enterprises (UME). UMG chairman & CEO Lucian Grainge works out of the company's Santa Monica headquarters. Universal Music Publishing is headquartered at 2100 Colorado Avenue, which is down the block from UMG's offices.

Hollywood

The Capitol Music Group is headquartered at the Capitol Records Building in Hollywood.[40] Tom Cage was assigned to the record label in 2004 after a short outing with A&M Records.

Universal City

The headquarter of the Universal Music GmbH is located in Berlin-Friedrichshain

Universal Music Group Distribution is headquartered in Universal City, CA.

New York City

UMG has a major workforce in New York City. UMG's New York City headquarters deals mainly with Universal's marketing, Information Systems, and finance. It is also where several of UMG's labels are headquartered. Island Records, Def Jam Recordings, Republic Records, Decca Label Group and the newly re-launched Geffen Records are all headquartered in New York City.

London

Universal Music Group Global (formerly known as Universal Music Group International (UMGI)) is headquartered in High Street Kensington, London. Global manages UMG's offices in most countries outside of North America.

Berlin

Universal Music GmbH, the German subsidiary, is headquartered in Berlin. It has moved in 2002 from Hamburg to the district Friedrichshain at the river Spree.

Warsaw

Universal Music Group. Universal Music Polska

Other locations

Universal Music Latin Entertainment is headquartered in Woodland Hills, California while Universal Music Group Nashville is headquartered in Nashville, Tennessee. Universal Music Group's parent company, Vivendi, is headquartered in Paris, France.

Criticism and controversies

CD price fixing

Between 1995 and 2000, music companies were found to have used illegal marketing agreements such as minimum advertised pricing to artificially inflate prices of compact discs in order to end price wars by discounters such as Best Buy and Target in the early 1990s.[41] A settlement in 2002 included the music publishers and distributors; Sony Music, Warner Music, Bertelsmann Music Group, EMI Music and Universal Music Group. In restitution for price fixing they agreed to pay a $67.4 million fine and distribute $75.7 million in CDs to public and non-profit groups but admitted no wrongdoing.[42] It is estimated suppliers/customers were overcharged by nearly $500 million and up to $5 per album which conflicts with proof of sale and purchase interests.[41]

Payola

In May 2006, an investigation led by then New York Attorney General, Eliot Spitzer, concluded with a determination that Universal Music Group bribed radio stations to play songs from Ashlee Simpson, Brian McKnight, Big Tymers, Nick Lachey, Lindsay Lohan and other performers under Universal labels. The company paid $12 million to the state in settlement.[43]

YouTube

In May 2007, UMG was accused of abusing the Digital Millennium Copyright Act in order to quell criticism, by forcing YouTube to remove several videos which contained UMG's music. Eventually, UMG retracted its claims after being challenged by the Electronic Frontier Foundation.[44] In the same year, UMG was accused of using the Digital Millennium Copyright Act to indiscriminately remove content related to the artist Prince, most notably a twenty-nine-second home video in which a child danced to one of Prince's songs.[45] In April 2016, UMG had the audio muted of a video clip showing Katherine Jenkins singing the British national anthem. They claimed that "God Save the Queen" was a copyrighted song, and YouTube initially complied with this request, but later allowed the video to be viewed with the original audio track.[46]

Myspace

In December 2007, UMG announced a deal with Imeem which allows users of the social network to listen to any track from Universal's catalogue for free with a portion of the advertising generated by the music being shared with the record label.[47] Two weeks after the deal was announced Michael Robertson speculated on the secret terms of the deal and argued that ultimately this was a bad deal for imeem. This speculation lead to a flame war on the Pho digital media email list as imeem representatives denied his claims and dismissed his theories as unfounded.[48] All traffic was redirected to MySpace after the company acquired Imeem on December 8, 2009.

Megaupload

On December 9, 2011, Megaupload published a music video titled: "The Mega Song", showing artists including Kanye West, Snoop Dogg, Alicia Keys and will.i.am endorsing the company.[49] The music video was also uploaded to YouTube, but was removed following a takedown request by UMG. Megaupload said that the video contained no infringing content, commenting: "we have signed agreements with every featured artist for this campaign".[50] Megaupload requested an apology from UMG, and filed a lawsuit against the company in the United States District Court for the Northern District of California, on December 12, 2011.[51][52] UMG denied that the takedown was ordered under the terms of the Digital Millennium Copyright Act, and said that the takedown was "pursuant to the UMG-YouTube agreement," which gives UMG "the right to block or remove user-posted videos through YouTube's CMS (Content Management System) based on a number of contractually specified criteria."[53] The video was subsequently returned to YouTube, with the reasons for the UMG takedown remaining unclear.[54] Lawyers for will.i.am initially claimed that he had never agreed to the project, and on December 12, he denied any involvement in the takedown notice.[55]

See also

References

  1. ↑ "The Origin & Many Uses of Shellac by R.J. Wakeman - The Antique Phonograph Society - The Antique Phonograph Society - Welcome to the worldwide home for people who love antique phonographs, gramophones and records!". AntiquePhono.org. May 6, 2015. Retrieved April 16, 2016.
  2. ↑ "US Decca LP Labels". HeroInc.0Catch.com. Daniels, Frank. 2003. Retrieved March 20, 2008.
  3. ↑ Rackmil, Milton R. (August 28, 1954). "Pioneers' Dream Becomes Reality With Decca". The Billboard. Retrieved December 16, 2011.
  4. ↑ Adegoke, Yinka (May 25, 2007). "Universal Music closes on BMG". Thomson Reuters. Reuters. Retrieved November 20, 2008.
  5. ↑ "Universal to buy BMG publishing". News.BBC.co.uk. BBC News. September 6, 2006. Retrieved November 25, 2007.
  6. ↑ "Vivendi Appoints Lucian Grainge Chairman & CEO of Universal Music Group". Billboard.biz. March 9, 2011. Retrieved December 16, 2011.
  7. ↑ Smith, Ethan (March 3, 2011). "Sony Music Recruits CEO". The Wall Street Journal.
  8. ↑ "Universal Music Group International promotes Max Hole to Chief Operating Officer". ifpi.org. March 15, 2010. Retrieved May 24, 2011.
  9. ↑ "Pop & Hiss". Los Angeles Times. January 10, 2011.
  10. ↑ Halperin, Shirley (March 17, 2011). "Barry Weiss Named Chairman/CEO of Island Def Jam And Universal Motown Republic Group". Billboard.biz. Retrieved December 16, 2011.
  11. ↑ "Ethiopia Habtemariam Named Senior Vice President of Motown Records". Billboard.biz. August 10, 2011. Retrieved December 16, 2011.
  12. ↑ "Citigroup Sells EMI in Parts for $4.1 Billion to Vivendi, Sony". Businessweek. December 8, 2009. Retrieved November 16, 2011.
  13. ↑ Warner Music Group Wants Part Of EMI Archived July 6, 2012, at the Wayback Machine. – Radio-Info.com Archived October 31, 2011, at the Wayback Machine. (released October 31, 2011)
  14. ↑ "color". impalamusic.org.
  15. ↑ "EU opens investigation into Universal, EMI deal". Reuters.
  16. ↑ "This page has been removed". The Guardian.
  17. ↑ Joshua R. Wueller, Mergers of Majors: Applying the Failing Firm Doctrine in the Recorded Music Industry, 7 Brook. J. Corp. Fin. & Com. L. 589, 602–04 (2013) (describing the antitrust scrutiny surrounding the sale of EMI's recorded music division to UMG).
  18. ↑ Sweney, Mark (September 21, 2012). "Universal's £1.2bn EMI takeover approved – with conditions". The Guardian. London. Retrieved September 21, 2012.
  19. ↑ Ingham, Tim. "Universal's Capitol takes shape: Barnett in, Beatles on roster". Music Week. Retrieved February 28, 2013.
  20. ↑ Sisario, Ben. "Universal Closes on EMI Deal, Becoming, by Far, Biggest of Remaining Big Three". Retrieved December 30, 2016.
  21. ↑ "FMQB: Radio Industry News, Music Industry Updates, Nielsen Ratings, Music News and more!". fmqb.com.
  22. ↑ Ingham, Tim (December 21, 2012). "BMG buys Mute catalogue from Universal". Music Week. Retrieved December 22, 2012.
  23. ↑ "Analysis: BMG Poised to Become a Top Indie Catalog Following Sanctuary Acquisition". Billboard. February 15, 2013. Retrieved February 28, 2013.
  24. ↑ "HP Connected Music teams up with Universal". Digital Spy.
  25. ↑ Sisario, Ben (February 8, 2013). "Warner Music Group Buys EMI Assets for $765 Million". The New York Times. Retrieved February 8, 2013.
  26. ↑ "Warner to buy the Parlophone Label Group". gramophone.co.uk. February 7, 2013. Retrieved February 28, 2013.
  27. ↑ [PIAS]‘s Co-op acquisition approved | CMU: Complete Music Update. Thecmuwebsite.com (March 26, 2013). Retrieved on July 16, 2013.
  28. ↑ "Universal Music Sells Now! European Rights to Sony Music". Bloomberg.
  29. ↑ Universal Music UK Announces Launch of Virgin EMI Records. Billboard (March 18, 2013). Retrieved on July 16, 2013.
  30. ↑ "Edel AG – Edel kauft legendäres Jazzlabel von Universal". edel.com.
  31. ↑ Universal Music Group (March 20, 2013). "Universal Music Group (UMG) & Disney Music Group (DMG) Expand Agreement Globally". prnewswire.com.
  32. ↑ "UNIVERSAL MUSIC GROUP (UMG) & DISNEY MUSIC GROUP (DMG) EXPAND AGREEMENT GLOBALLY". universalmusic.com.
  33. ↑ Motown Records and EMI Gospel Announce Joint Venture: Motown Gospel | EURweb – Part 1. EURweb (April 2, 2013). Retrieved on July 16, 2013.
  34. ↑ "Vivendi Declined SoftBank’s Lucrative Offer for Universal". The New York Times. July 19, 2013. Retrieved December 30, 2016.
  35. ↑ EMI Music Arabia November 14, 2013. Retrieved on December 1, 2013
  36. 1 2 3 4 Sisario, Ben (April 1, 2014). "Universal Music Group Breaks Up Its Island Def Jam Division". The New York Times.
  37. ↑ "Universal to Create Hulu-like Music Video Site". Retrieved August 10, 2016.
  38. ↑ "John Janick to Succeed Jimmy Iovine as Chairman, CEO of Interscope Geffen A&M". Billboard.biz. May 28, 2014. Retrieved May 28, 2014.
  39. ↑ "It's Official: David Foster Named Chairman of Verve Music Group". Billboard.biz. December 15, 2011. Retrieved December 16, 2011.
  40. ↑ "Steve Barnett to lead Capitol Music Group". latimes.
  41. 1 2 Stephen Labaton (May 11, 2000). "5 Music Companies Settle Federal Case On CD Price-Fixing". The New York Times. Retrieved April 26, 2016.
  42. ↑ David Lieberman (September 30, 2002). "5 Music Companies Settle Federal Case On CD Price-Fixing". USA Today. Retrieved April 26, 2016.
  43. ↑ "Universal settles payola probe". USA Today. May 11, 2006. Retrieved December 10, 2011.
  44. ↑ "Universal Music Group Backs Off Claims to Michelle Malkin Video". Electronic Frontier Foundation. May 14, 2007. Retrieved December 16, 2011.
  45. ↑ Lenz v. Universal Music Corp.
  46. ↑ "They Are The People". April 22, 2016. Retrieved August 10, 2016.
  47. ↑ (Internet Archive of original link)
  48. ↑ Barnett, Megan (December 21, 2007). "Digital Music War Gets Dirtier". Portfolio.com. Retrieved December 16, 2011.
  49. ↑ RIAA Label Artists & A-List Stars Endorse Megaupload In New Song December 9, 2011. Retrieved December 13, 2011.
  50. ↑ Universal Censors Megaupload Song, Gets Branded a "Rogue Label" December 10, 2011. Retrieved December 13, 2011.
  51. ↑ Megaupload threatens to sue Universal over YouTube video The Guardian (London), December 13, 2011. Retrieved December 13, 2011.
  52. ↑ Megaupload to Sue Universal, Joins Fight Against SOPA December 12, 2011. Retrieved December 13, 2011.
  53. ↑ UMG claims "right to block or remove" YouTube videos it doesn't own Ars Technica, December 16, 2011. Retrieved December 16, 2011.
  54. ↑ File-Sharing Company Sues Record Label, for a Change New York Times, December 13, 2011. Retrieved December 16, 2011.
  55. ↑ UMG, MegaUpload Case Gets Even Stranger; Will.i.am Says He Didn't Authorize A Takedown Techdirt. December 15, 2011. Retrieved December 17, 2011.
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