On Sept. 23, 2014, Lucian Grainge summoned the heads of Universal Music Group's labels and his executive committee to dinner at his home in the affluent Pacific Palisades neighborhood of Los Angeles. Among the people present were Universal executive vp Michele Anthony, Republic's Monte and Avery Lipman, Island's David Massey, Interscope's John Janick, Capitol's Steve Barnett and David Joseph, chairman/CEO of Universal U.K. Despite UMG's stellar 2014, Grainge didn't call the meeting to celebrate. Instead, he declared that the time had come for the company to "hit the reset button." The big question of the night, as Joseph recalls: "What does the music company of tomorrow look like?"
It says everything you need to know about Grainge's tenacity and, as the world's most powerful record executive, his leverage, that he's not complacent over UMG's success. As he tells Billboard, "The industry broke five new artists in 2014, and we broke four of them" -- Iggy Azalea, 5 Seconds of Summer, Ariana Grande and Sam Smith, who each sold more than 1 million albums and track equivalents in the United States in 2014, according to Nielsen Music. UMG distributed seven of the top 10 albums, including the year's best seller, Taylor Swift's 1989, and led the industry in market share with 38.7 percent -- 10 points higher than its nearest competitor, Sony Music.
"Identifying new artists cannot be done through data or algorithms." --Grainge
In fact, UMG's 2014 market share was the second-highest since Nielsen began tracking sales in 1991 (the company set the record in 2013, with 38.8 percent). UMG owns three of 2014's top five labels: Republic Records (No. 1), a revived Capitol Music Group (No. 3) and Interscope Geffen A&M (No. 5). And Grainge presided over a remarkably smooth transition when Jimmy Iovine, co-founder of UMG's long-standing leader Interscope, left the company, and Janick took over. (That changeover was undoubtedly eased by the payout Universal earned when Iovine and Dr. Dre sold Beats to Apple: $404 million, from UMG's 13 percent share.)
All of this gives Grainge -- who has a son from his first marriage, and a daughter and stepdaughter with his wife Caroline -- an unparalleled amount of influence in the industry. "Lucian loves artists, songs and music," says Irving Azoff, chairman/CEO of Azoff Madison Square Garden Entertainment. "He humanizes the CEO role, and I know he will make decisions that are artist-friendly."
In the age of Spotify, YouTube and Shazam, Grainge is positioned to tackle his business' overriding priority: win fair compensation for artists, and take full ownership of content that other parties have been profiting from. "I want to broaden our definition of a music company," Grainge says. "Technology [has] given us the opportunity to have a conversation with consumers in a way we haven't before. There's so much that we're doing to reimagine our intellectual property and working with the artists to create more." Specifically, "it's what we're doing with data," he says, "monetizing all the promotion around our music."
After years of record labels suffering from advances in the digital realm rather than benefiting from them, Grainge is putting copyright owners back on the offense. He has the artists, market share, publishing and now, possibly, the technological wherewithal to take back some of the clout (and revenue) that has been lost. "Some music execs are good at making the fourth-quarter numbers," says Will.i.am, "and some have the ability to fast forward, and bring tomorrow's music biz closer to today. Lucian does both."
Grainge was unfazed by the mixed response to one of his highest-profile efforts at experimentation: U2 slipping its album Songs of Innocence unbidden into every iTunes account last September. "I'm not sure I would have done anything differently," he says. "This was important to the band, which meant it was important to me."
"His eye is always on the future." -- Lana Del Rey
His love of music helps explain how he has re-energized UMG's A&R departments. "I started as a talent scout, and I'm still talent scouting," says Grainge, who was born in London and spent much of his career in the United Kingdom. "Identifying and developing new artists cannot be done through data or algorithms." And when UMG does use technology and data, it benefits the talent the company has brought on. "Because the tools we've developed are also available to our artists," Grainge says, "we've strengthened the sense of collaboration between them and our labels. When marketing decisions are made, they're done with greater transparency."
Grainge's "desire and ability to collaborate is second only to his love of music," says Evan Spiegel, the 24-year-old CEO of photo-messaging company Snapchat, and one of the young entrepreneurs Grainge has relied on for insight and opportunities. (UMG has worked with Snapchat on artist promotion.) Since replacing Doug Morris as CEO in 2011, Grainge spearheaded the purchase of EMI for $1.9 billion (2012), struck a global partnership with Jay Z's Roc Nation (2013), inked a distribution deal with Glassnote Entertainment Group and acquired Eagle Rock Entertainment (both 2014).
UMG's latest partnership, announced in January: forming the Global Music Data Alliance with Havas Group. The deal will allow UMG to analyze billions of data points on consumer behavior and to find additional revenue streams for UMG's artists and labels through branding, advertising, merchandising and more. Grainge's mantra -- he repeats it four times during Billboard's interview -- is to "capture the value" of UMG's intellectual property. It's a fitting maxim for a man shepherding the work of artists like Kanye West and Lana Del Rey, who are both working on new records for 2015. As Del Rey tells Billboard, "Lucian has such an extensive knowledge of music history, yet his eye is always on the future. As artists, we're lucky he's at the helm."