GRAINGE ON UMG’S “ARTIST-CENTRIC” APPROACH

During UMG’s Q2 earnings report on Wednesday (7/26), Sir Lucian Grainge had the following to say on the company's "artist-centric" approach:

“We’ve long believed that streaming monetization in both developed and emerging markets has significant upside,” he began. “Therefore, we obviously welcome Spotify’s announcement that they will increase prices in more than 50 territories, as well as YouTube’s announcement that they have raised the price of their subscription music service in the U.S.

“But addressing average revenue per user, or ARPU, is just one component of the artist-centric approach.

“First, we must ensure that real artists with real fanbases are fairly rewarded for the platform engagement they drive.

“Second, that platforms need to apply stricter fraud detection and enforcement systems, removing incentives for bad actors, and protecting streaming royalties for legitimate artists. This includes ensuring real artists don’t have their royalties diluted by noise and other content that has no meaningful engagement from music fans.

“And third, better aligning the relationship between artists and fans by promoting greater discovery and promotion of real artists.

“And on these three critical points, Spotify shares these concerns, and as a part of our newly expanded agreement, they have committed to continue to work to address them. In addition, they will be collaborating with us on deep data analysis, formally taking part in this foundational piece of our expanding artist-centric initiative.

“To summarize: Who are the winners under this new model? Real artists. By which, I mean, artists at all stages of their careers, who are DIY, independent or major, who are real, actual, human beings who have real, actual fans. Who are the losers? Those devoted to gaming the system, to committing fraud, and to flooding the platform with content that music fans do not want.

“There are many others in the music industry who share our firmly held principles about the value of artistry and the artist-fan relationship. I’m confident that the unique structures we have put in place, and those we are working on with a number of other partners, will bring those principles to life across the streaming world. Again, I want to stress, our goal is a simple one: to promote an environment in which great music does not drown in a sea of noise, an environment in which fans can enjoy a more satisfying experience and creators of music content are more fairly compensated.”