Lucian Grainge of Universal Music Group: Executive of the Decade

Grainge, 59, rode into the decade as the heir apparent of industry legend and then-UMG chairman/CEO Doug Morris. A fan of punk bands like The Clash and Sex Pistols, he got his start in the music publishing business toward the end of the 1970s, signing The Psychedelic Furs. He joined Universal Music in 1986, launching PolyGram Music Publishing in his native United Kingdom, then rose through the ranks to chairman/CEO of UMG’s international division by 2005. By January 2011, when he took the top job at UMG, the music business was in its 12th year of a decline spurred by digitalization and piracy that threatened the industry’s existence.

Grainge had a plan, though. During his first two years in charge, he bucked conventional wisdom and led UMG through the ambitious acquisition of EMI Recorded Music and announced that the company would be investing in A&R and developing new artists. His strategy quickly began to pay off: Vivendi turned down an $8.5 billion offer from Softbank for UMG in May 2013 as the company’s valuation began to rise. “When Lucian believes in something, he goes for it,” says Morris.

Grainge was also early to embrace the idea that streaming would transform the music business and return it to growth. When he licensed UMG music to Spotify for its 2011 launch in the United States, Grainge had already laid the groundwork to take advantage of the new, more global music ecosystem.

“Countless times over the past decade, I have observed Lucian provide leadership that has benefited not only UMG, but meant renewed growth for the entire industry,” says Spotify CEO Daniel Ek.

That has come with a continued dedication to A&R, even at the business’ lowest moments. “Through the years when the industry was on the ropes, he always protected A&R and encouraged me to sign,” says UMG U.K. & Ireland chairman/CEO David Joseph.

“Businesses, industries and economies go in cycles, and whatever business cycle we were in, the passion and the excitement and the cultural impact of music never changed,” says Grainge. “I learned from my first boss — the late, great Maurice Oberstein — something in the first industry recession of 1981: that you protect your A&R investment like a dog protects its owner.”

For Grainge — who received a knighthood from Queen Elizabeth in 2016, in recognition of his accomplishments in the music industry — early investment in emerging markets, international expansion and local-language music also gave the company an edge that’s still paying dividends today, boosting UMG’s global dominance. By the end of 2018, he wrote in his year-end letter to UMG staff that the company had grown its market share to over 40% globally, and with new offices in Africa and Southeast Asia, as well as a licensing deal with Tencent in China, the company was aiming for even more.

“When I said a few years ago that I believed reggaetón could go global, many people told me it would never happen,” says J Balvin, whose Spanish-language “Mi Gente” with Willy William has racked up 1.1 billion U.S. streams since its release in the summer of 2017, the same year that Luis Fonsi and Daddy Yankee’s “Despacito” became the biggest song in the United States. “But Sir Lucian and the rest of the Universal team said, ‘How do we help make it happen?’ ”

At the end of 2014, Grainge turned his attention to broadening the concept of what a music company could be, keeping an eye to the future beyond quarterly results. Investments in film and TV led to projects like the Academy Award-winning documentary Amy, about Amy Winehouse, a film spearheaded by Joseph; while the expansion of merchandising wing Bravado led to a boom in pop-up shops and direct-to-consumer sales strategies.

“To me, he’s more than just the head of Universal,” says Elton John, whose biopic Rocketman had its soundtrack released by UMG’s Interscope. “He’s a loyal and trusted family friend.” Adds Nick Jonas, “For someone at such a high level to be as aware of his larger-than-life roster is incredibly inspiring.”

Now, as Grainge enters his second decade at the helm of UMG having redefined both the role and value of the modern record company, what’s left on his agenda? “I’m just starting,” he says, laughing. “Once a punk, always a punk.”

What does the Tencent deal mean for Universal?

Tencent understands technology and media, they’ve proven themselves to be terrific investors, we’ve got an exceptionally good relationship, and both we and Vivendi felt that they would be a great fit. And I’m excited about the commitment to continue developing the Chinese and the broader Asian market. It’s an incredibly important market — you can see how it has started to monetize — and I’m optimistic about the potential.

At the beginning of the last decade, UMG announced that you would be taking over as global CEO. How did you prepare?

I’d been at the company for over 20 years, and I was coming from being the head of international. When you’ve been in an organization for 22 or 23 years, managing 60 or 70 countries, you have deep relationships on both the creative side and the business side. The relationships I had with the U.S. labels were incredibly strong — all the American music came through the companies that I managed. So I had relationships with managers, with artists, with entire creative ecosystems, and it enabled me to slip into this job, however daunting it felt at the time. We all had a feel for one another.

You bought EMI’s recorded-music business at the bottom of the market, at a time when the owners had cut back and some artists were dissatisfied. Why did you feel it was the right move?

I didn’t feel it was — I knew it was, to be honest. Growing up in the U.K., EMI had so much influence on British culture and British music. And I felt that EMI — the labels, the catalog, the artists — was a thing of beauty. You look at a Picasso or a Rembrandt; these things become available maybe every 20 or 30 years.

If you look at the path EMI was on at that time, it was one of contraction — finding synergies, closing labels, etc. And we did completely the opposite. I’ve always had the confidence to invest. And when you come out of a down cycle, that can be the most rewarding — creatively, culturally, financially. I started as a talent scout, and the desire to break barriers and find new artists never ends. As long as you have the backing of your boss and/or shareholders, that’s the only thing you need — and I’ve been fortunate enough to have that.

You’ve always been open to — even optimistic about — digital innovation, even back when a lot of music executives weren’t. How did you see what others missed?

I was fortunate because I had a job managing 60 countries — excluding the U.S. — and I learned very fast that one size didn’t fit all. Back then it amazed me that Belgium could be 50 yards from Holland, yet the distribution infrastructure was entirely different and the consumer was entirely different in terms of what they liked and how they behaved. The same applied to France and Italy. And that encouraged me to be open-minded. When you’re managing so many countries, you’re meeting so many distribution partners, entrepreneurs, telcos, distribution networks, all at different phases of their own development — and I had a helicopter position above it, and that’s why digital innovation excited me. Music is about cultural shifts, and that doesn’t have to apply just to the song — it can also apply to the technology.

Was it difficult to change the structure of the company to accommodate that?

I can be quite persuasive. (Laughs.)

When you started, you immediately went against conventional wisdom: You bought a company when music valuations were falling and invested when most of the business was cutting back. How did that set a new tone at Universal?

Breaking down barriers is what leadership is all about. That, and not being scared. If you’re in a crazy business and you’re constantly taking risks — and you’re comfortable with risks — you end up not being scared of anything. I’ve always been around entrepreneurs — people like Chris Blackwell and Richard Branson — and I always appreciated, as a student of the music business, how these companies were created. I was always comfortable around that. You can’t be around musicians when they’re moving culture without being comfortable with that. And that’s something that I instituted into the rest of the company. I like change. I was criticized 20 years ago by someone who said, “The trouble is, you like mini revolutions all the time.” And I said, “I don’t know why you’re telling me this, but I like it already.” So there you go.

You’ve expanded what a music company can be, aggressively building Universal’s merchandise business and producing films and TV shows.

I’ve never taken the view that we’re just a distribution company. Everything starts with the song and the artist, and that gives us a way into many businesses. So David Joseph in the U.K. came to me years ago with an idea to produce a documentary about Amy Winehouse, and we’ve done documentaries with Pavarotti (Pavarotti), The Beatles (Eight Days a Week—The Touring Years) and others. We’ve invested in short-form video. We were the first company to really see music merchandise as a potential e-commerce opportunity, and I believe we’ve taken that from being a black T-shirt business based around touring into one based around brands. We have to be — I need us to be — best in class wherever we can be.

You’ve also led in investing in local markets, particularly in local-language music in Latin America and Africa. What has that allowed you to do?

It has allowed us to have deep-rooted creative relationships in these markets. I was optimistic about the importance of music to local culture, and I just always had a hunch that when those markets came back, we would be in a terrific position to capture the momentum. You look at Latin America — the things we’ve been doing in the region with our artists have ended up being two of the biggest songs, “Mi Gente” and “Despacito.” You look at the impact of Luis Fonsi, just in terms of audiovisual, it’s fantastic. And if we hadn’t been there investing over the past 15 years, we would never be in the position that we’re in. And we’ve been doing that in many markets. We’re really trying to create something imaginative, in India, for example. When it really delivers — whether that’s in a year or two or three — we’re patient.

At the beginning of the decade, UMG’s labels were very competitive with one another. Over the past few years, though, you’ve grown your central team. How did that develop, and why is it important for the company now?

It’s not really that big of a change. All you’re seeing is the individual entrepreneurial structure of labels, led by brilliant record guys, plus we’ve reacted to the possibilities that technology has given us in terms of raw data. So where we can, we’ve created a team to support the artists and labels on a global basis when necessary. Internally, the environment is competitive, but I don’t know anything else — it’s where I came from. And I want an organization of winners. One of our greatest achievements in our culture here is that we’re strong — and we’re strong together. I want everybody to be completely individual, but also for there to be a culture of stronger together. That’s something I learned in the U.K. in my formative years, and it stays with me now.

After everything you’ve accomplished, what continues to motivate you?

Music. Music, artists and everything new. New, new, new — what’s tomorrow? What can we do to get better? Is it a better album, is it a better song, is it a better single, is it a better campaign, is it an understanding of how we utilize all the things we’ve learned with regards to technology and entrepreneurship? Everything is about tomorrow.

This article originally appeared in the Jan. 25, 2020 issue of Billboard.