Chairman/CEO, Universal Music Group
Here’s how Universal Music Group chairman/CEO Lucian Grainge sums up 2018: “It was a very good year for the industry. It was a terrific year for us.” In fact, UMG enjoyed what may be the most dominant year by a music company in modern history. Its market share for current recordings — driven by a portfolio of labels that includes Republic Records, Capitol Music Group and Interscope Geffen A&M — exceeded 40 percent, nearly double that of second-place Sony Music Entertainment and greater than Sony and UMG’s other rival, Warner Music Group, combined.
As streaming has surged, so have the fortunes of many record labels. But UMG has gained on its rivals thanks to the heavier bets Grainge, 58, placed years ago on hip-hop and A&R, investing long before the prices of signing talent rocketed to their current highs and putting UMG in a better position to splurge today.
UMG-distributed recordings accounted for the top five most-streamed tracks on Spotify in 2018, as well as the year’s top two most-consumed albums, Drake’s Scorpion and Post Malone’s beerbongs & bentleys; Spotify’s most-streamed female artist of the year, Ariana Grande; the highest-grossing music biopic of all time, Bohemian Rhapsody (which Grainge has seen three times); the film soundtrack song that is nominated for two Grammys and an Academy Award, “Shallow,” from A Star Is Born; and music from the Kendrick Lamar-curated Black Panther: The Album, which is up for eight Grammys.
In the first three quarters of 2018, UMG labels and Universal Music Publishing Group (UMPG) posted revenue of $4.9 billion, up from $4.4 billion in the same period of 2017. But that’s in the past. Grainge will likely spend a good part of his 2019 presiding over the sale of as much as half of the company, given an announcement that UMG’s parent company, French media giant Vivendi, made last July. It’s a development that Grainge brushes aside.
“Whatever works for Vivendi and Vincent Bolloré,” he says amiably while seated at a large table in his Santa Monica, Calif., office. “I’m an easy customer.” (Bolloré is the ex-chairman of Vivendi, a member of its advisory board and its largest shareholder.) Earlier that morning, Deutsche Bank estimated that UMG was now worth a robust $33 billion, a value somehow greater than that ascribed to its parent. Rumored suitors include Liberty Media and Chinese tech giant Tencent, and if a sale transpires, it would transform the company, the industry and, presumably, the job Grainge has held since succeeding Doug Morris in 2011.
Grainge joined Universal in 1986 to launch PolyGram Music Publishing U.K., and he reflects that “in June, I will have been at this company in one form or another for 33 years.” In the wake of Napster, “we suffered through 12 or 13 years of decline. I’ve been around long enough to know that what goes up can also come down.”
Grainge has kept a careful watch on the rising power of the streaming services. In 2016, he banned his artists from signing exclusive distribution/marketing deals with them. And in November 2018, amid industry fears that Spotify or Apple could pursue top acts with direct deals, UMG signed potential free agent Taylor Swift to a new global recording contract. Swift shifted her label base from indie Big Machine to UMG-owned Republic and was granted eventual ownership of her future master recordings. She also successfully advocated for her fellow UMG artists to be compensated from the future sale of UMG shares in Spotify regardless of whether or not they had recouped their advances, an artist-friendly provision that even the most jaundiced critics applauded. “Taylor’s vision of the future and of fairness collided simultaneously with ours,” says Grainge of the terms of the Spotify payout, which could be worth an estimated $300 million to UMG acts.
Swift, in an email to Billboard, says that “Lucian is one of the rare, bold, pioneering leaders in this industry. Having gotten to know him more in recent years, I admire his true passion for music and his belief in the vision an artist has. He takes that passion and that belief and puts all of his unstoppable drive behind it. I’m very grateful that we share similar values in terms of fairness and compensation for creators, and I’m happy that we’ll get to work together to help move things in a positive direction in that sense as we explore the exciting new avenues for people to find and fall in love with music.”
Among top industry power brokers, Grainge may have been the most prescient in recognizing the outsized role that hip-hop would play in streaming and game-planning around this generational shift. Republic has a lucrative partnership with Cash Money/Young Money (Drake); Interscope is home to the Black Panther soundtrack, through Top Dawg Entertainment, and to 20-year-old Juice WRLD, Billboard’s 2018 top new R&B/hip-hop artist; and Motown’s joint venture with Quality Control Music (Migos and Lil Baby) reinvigorated the stalwart label.
“When we had just signed City Girls, we met with Lucian,” says Quality Control Music CEO Pierre “P” Thomas. “Me and Coach [COO Kevin Lee] had been getting a lot of backlash about the group: ‘They ain’t Quality Control,’ that sort of thing. We showed Lucian the first video they shot, and the first thing Lucian says is: ‘Those girls are superstars. They have the potential to be the urban Spice Girls.’ That really fucked me up! I didn’t think that a guy in Lucian’s position would get them. It really changed the way we thought about City Girls.”
Meanwhile, UMG-owned indie distributor Caroline released two of 2018’s most streamed — and controversial — artists: 6ix9ine, who faces substantial prison time after pleading guilty to nine felony counts of racketeering, conspiracy, narcotics trafficking and firearms offenses, and slain rapper XXXTentacion, whose ? album debuted at No. 1 on the Billboard 200. “I started off as a punk with red hair,” says Grainge, “around [the time of] The Clash, The Sex Pistols. I’m excited by change, by cycles. I love that hip-hop is the new pop music.” Grainge’s enthusiasm is shared by his son, Elliot, who signed 6ix9ine and another hot rapper, Trippie Redd, to his 10K Projects label.
UMG still faced its share of challenges in 2018. In March, the company severed ties with Republic Group president Charlie Walk after women came forward with allegations of sexual misconduct that spanned his career at Sony and Republic. An internal UMG investigation resulted in his exit. Grainge declined to comment on Walk, but addressed wider diversity efforts at the company, including its participation in the University of Southern California’s Annenberg Inclusion Initiative — “just one part of a range of efforts,” he says. They include She Is the Music, an industrywide nonprofit co-founded and led by UMPG chairman/CEO Jody Gerson that is “driving equality for women,” says Grainge. He adds that while 49 percent of UMG’s U.S. staff are women, “we can’t stop there.”
“We constantly have to change,” he says more broadly. “I’m never satisfied. That can make me tough to work for. I like fresh blood, new ideas — not just for the hell of it, of course, because change isn’t always fun. But there’s nothing that I’m not looking at, or that we’re not trying.”