Universal Music Group advertising & marketing assignments

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Universal Music Group is the world's biggest music company, with a leading 31% share of the global recorded music market in 2018. Universal's top selling artists of 2019 were Billie Eilish, Post Malone, Taylor Swift, Ariana Grande and (for the second consecutive year) the 'A Star Is Born' soundtrack. Universal also manages a huge catalogue of other current or past acts, including Drake, Kendrick Lamar, Sam Smith, Rihanna, Ellie Goulding, Justin Bieber, Kanye West, The Beatles, The Rolling Stones and Elton John. Its labels include Motown, Polydor, Island, Def Jam, Deutsche Grammophon and Blue Note as well as Virgin and Capitol. Originally formed from the 1998 merger of European giant Polygram with US-based MCA/Universal, Universal Music has continued to expand as the industry has shrunk, most recently through the acquisition of most of former rival EMI's recorded music division in 2012. In publishing, its UMPG is the global #2. Another key division is Universal Music Group & Brands, an inhouse promotional marketing agency organising branding partnerships with advertiser clients. Separate division Bravado claims to be the industry's only full service music merchandise company, and in 2017 the group relaunched the Polygram label for film and TV content development. Newly knighted in 2016, Sir Lucian Grainge is group CEO. Despite multiple acquisitions and other moves to reinforce Universal's global position, revenues fell steadily in the early 2010s before finally turning around in 2015, partly as a result of currency fluctuations, but also the surge in revenues from digital streaming. Revenues soared by 19% in 2019 to €7.2bn (approx $8.0bn), of which €3.3bn was generated by digital streaming and subscriptions. Reinforcing that invaluable new revenue source, the group has wide-ranging partnerships with Facebook, Amazon, Tencent , YouTube and Apple. Universal Music has been owned since 2000 by French media group Vivendi, which acquired the business from drinks group Seagram. However, since mid 2018 it has been negotiating with different strategic partners over a partial investment in the business. At the beginning of 2020 it announced the sale of a 10% stake to a consortium led by China's Tencent for €3bn.

Capsule checked 20th February 2019

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Recent stories from Adbrands Update:

Adbrands Daily Update 2nd Jan 2020: After more than a year of negotiation with different partners, Vivendi agreed to sell a 10% equity stake in Universal Music to a consortium led by Chinese media company Tencent. The price tag of €3bn values Universal at €30bn. Tencent also gets an option increase its stake by up to another 10% at the same valuation before January 2021. Tencent is China's biggest streaming music service, and the deal will bolster its local operation. A separate deal will be concluded later this year to give the streaming business a minority position in Universal's local operations in China.

Adbrands Weekly Update 2nd Aug 2018: In an unexpected development, French media and communications group Vivendi announced plans to offer up to half of global giant Universal Music to one or more as yet unidentified strategic partners. "Our goal is to determine a list of potential partners that would help us to obtain the best valuation for Universal while accelerating its growth," said Vivendi CEO Arnaud de Puyfontaine. The sale process will begin later this year, with a view to completion at the end of 2019. The once-troubled music company is currently riding high on the strength of streaming revenues, so Vivendi presumably hopes to maximise the benefits of its current value. However, the business accounts for almost half of group revenues, and over half of profits, and has been performing better in recent months than Vivendi's next most important business Canal+.

Adbrands Weekly Update 22nd Feb 2018: Revenues have been rising steadily at French conglomerate Vivendi since Vincent Bollore took control of the group in 2014. His predecessors had been steadily divesting what they considered to be non-core assets; he has just as steadily been moving back into areas such as telecoms and gaming (and indeed marketing) that had previously been exited. As a result, revenues have rebounded from a low of just over €10bn in 2014 to €12.4bn for last year, including a part-year contribution from newly consolidated Havas. Attributable net income was slightly lower at €1.2bn, but the adjusted figure excluding exceptionals jumped by almost 75%. Challenges remain, not least at Canal+, where revenues were flat at €5.3bn. Continuing declines in France - where direct subscriber numbers fell below 5m at the end of the year, from over 6m in 2015 - were offset by growth elsewhere, primarily in Africa and to a lesser extent Poland. However, Universal Music is enjoying the benefits of the resurgence in the global music business, with revenues up 8% to €5.7bn, helped by a near-one-third increase in revenues from streaming to almost €2bn. Universal alone contributes over 70% of Vivendi's operating profit.

Adbrands Weekly Update 14th Jul 2016: Universal Music Group moved its £10m UK media account from Mediacom, which has handled the business for more than 30 years. The winner was Arena Media, a unit of Havas, and the transfer is said to have resulted from the direct intervention of Vincent Bollore, chairman of Universal's parent Vivendi as well as owner of the Havas group.

Adbrands Weekly Update 8th Jan 2015: The music industry also suffered another slump in performance as a result of the rise in popularity of streaming services over downloads and physical product. In the US, total album sales slumped by 11.2% to 257m units, and track sales by 12.5% to 1.1bn. That was offset by a 54% jump in on-demand streaming to 164bn songs, an impressive total but at much lower prices. Revenues aren't available yet, but were down by almost 5% at the half-year mark. Taylor Swift's 1989 (Big Machine/Universal Music) was the top-seller in the US with almost 3.7m units, ahead of the Frozen soundtrack (Walt Disney/Universal Music) with 3.5m. In the UK, the world's third biggest music market after the US and Japan, combined retail sales slipped 1.6% to £1.03bn. For the first time since the launch of digital music, album downloads declined year-on-year to 30m units (from 32.6m in 2013). There was sharp rise in streaming subscriptions, sales of which jumped by almost two-thirds, but their combined value to the industry was just £175m, considerably less than the value of lost downloads. That figure doesn't take into account the number of people who shifted their music consumption to ad-supported free streams. Ed Sheeran's x (Warner Music) was the best-selling album in the UK with 1.7m copies sold. Around a third of those purchases were made in just the last two weeks of the year. Sam Smith's In The Lonely Hour (Capitol/Universal Music) was the #2 album with 1.2m copies in the UK.

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