garbage bags on green grass field

Universal Music Group announced its latest strong set of financial results yesterday. The company’s Q3 revenues were up 3.3% year-on-year to €2.75bn, although in constant currency the growth would have been 9.9%.

However, it is comments made by chairman and CEO Sir Lucian Grainge in UMG’s earnings call that will reverberate around the industry today. Grainge was asked about some of the criticism of his company’s efforts to devise a new ‘artist-centric’ streaming payouts model with DSP partner Deezer.

“The adoption of artist-centric has moved faster than we’d anticipated, and there’s a reason for that, and it’s simply that it’s good for artists, it’s good for the platforms, and it’s good for fans,” said Grainge, before taking the metaphorical gloves off.

“I have a reputation for being blunt, so I’ll be blunt. Those peer groups who have expressed a concern about artist-centric are unsurprisingly those whose business model is based on being merchants of garbage. Sorry, I can’t really think of another word for content that no one really actually wants to listen to,” he said.

“So if you’re committing fraud or flooding the platforms with content that has absolutely no engagement with fans; doesn’t help churn; doesn’t merchandise great music and professional artists; then I suppose you’re not going to be in favour of artist-centric. So if it’s an opportunity for us to call them out, I suppose that’s where we are.”

As a reminder, concerns about the model have been expressed by French music firm Believe; European indies body Impala; UK indies body Aim; and – in a recent column for Music Ally –the founders of Beggars Group, Secretly Distribution, Wagram Stories and Because Music.

(Obligatory caveats time! In all the case above, the concerns were accompanied by praise for certain aspects of the UMG/Deezer model; Wagram Stories has since signed on for it; and since Grainge did not mention any specific critic by name, he could argue that he wasn’t referring to these companies and bodies specifically.)

Grainge went on to stress that for UMG, artist-centric “is an approach, it’s a set of principles, and the idea is that it can be implemented on each platform in a bespoke way with all sorts of different platforms and different DSPs and companies, and improved over time”.

He also cited various UMG artists including the Beatles, the Rolling Stones, Taylor Swift, Olivia Rodrigo, Eminem, Elton John and Queen as touchstones for the approach.

“These are professional artists, and they are not vacuum-cleaner sounds or rain on a pane of glass, gaming the system. I believe passionately in this, and I believe passionately in what we’ve been doing.”

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Music Ally's Head of Insight