UMG DROPS THE HAMMER ON EXCLUSIVES

Insiders are calling the Frank Ocean situation the straw that broke the camel’s back in terms of online exclusives for UMG releases, as outlined in a highly confidential memo from label group chieftain Lucian Grainge to top company execs.

There have been high-level discussions for some time at the majors about how these exclusives are counterproductive and even damaging to their worldwide revenue from and relationships with their partners, notably Spotify, which has become arguably the majors’ biggest account.

The conversation ramped up in the wake of Kanye West’s and Rihanna’s Tidal exclusives, which dealt a significant blow to UMG given Tidal’s limited subscriber pool and lack of retail component. Subsequent Apple exclusives obviously yield greater revenue in both streams and sales, but due to the effect internationally and with other big digital partners, it’s believed that rights holders needed to take greater control of the situation. Clearly, with Grainge’s memo, that belief is becoming policy. How will Apple—and the artists and their managers—respond?