NEAR TRUTHS: THE SQUARE ROOT OF PIE
Somewhat obscured by the boffo marquee numbers on UMG’s recent financials call were Sir Lucian Grainge’s remarks about streaming and catalog acquisition, both of which underscored his commitment to continued rapid growth and an expanded marketplace.
As regards streaming, Grainge advanced the company’s agenda of addressing the flood of “noise” designed to game the system by directing DSP algorithms to low-cost content (like gentle waves for sleeping and soundalike cover versions of hits). Instead, the hope is that the model can be adjusted to reward acts that drive engagement.
Another piece of the puzzle lies in new superfan revenue pathways beyond streaming. Superfans are, of course, eager to invest in artist-adjacent NFT/metaverse content, physical merch and/or fan-club membership. How that might be manifested will depend on each DSP’s inclinations, but as an overall strategy, it's clearly in alignment with streaming services’ desire to maximize user buy-in.
With respect to catalogs, the Uni boss indicated that unlike many of the song-management and investor-class players on the field, UMG—though it assesses everything on the market—has priorities beyond merely being a “bank” and is laser-focused on only the most remunerative opportunities, those that will “accelerate our growth.” Grainge also took a shot at high rollers who’ve been acquiring artist-side rights only and thus still depend on the efforts of rightsholders to grow income, noting that these entities don’t have sufficient ownership “to manage anything.”
While we’re on the subject of DSP reform, biz wonderers continue to wonder: Why hasn’t Spotify raised its prices? Apple, Amazon, Disney, Hulu, Netflix and Paramount, to name a few, have all done so. A modest increase would produce an instant boost for everyone’s bottom line, economic headwinds be damned. What’s the holdup?
