A kinda funny article as their stock price is always being manipulated and meaningless especially that if you look at their major shareholders it is obvious that Universal. the biggest record company in the world., intends to go private in 2026 with Bill Akeman, Tencent, Vivendi, Vincent Bolore and a future shareholder, I will not name, have planned to go private along. Remember that under their new structure 50% of earnings must be distributed annually via dividends hence why they partner with companies like Reservoir to purchase assets [which they double dip on by holding the distribution rights.] Bill and Vincent are brilliant billionaires and once Grainge retires the 'new partner' will make an offer to all other shareholders so don't be surprised to see the stock keep going down so UMG can do more stock buybacks diluting 'the sheep'. PS - They know a lot about Superfans and how to exploit such plus if you look closely their merch business has increased by close to 40% PS 2 - They are also diversifying into the ,ive business like Sony. The latter is buying live venues every month across the world.
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Taylor = Total Control 📈 UMG = No Control 📉 It’s no surprise who’s winning. In yesterday’s post I talked about how control was the key factor in Taylor Swift’s incredible success story. Here’s another example of where control is critical. But this time it’s a lack of control - and it is resulting in a massive devaluation of the beast that is UMG. A beast that until recently seemed unstoppable. Have a read of this excellent analysis from Yuval Rotem on Seeking Alpha. The problem is Universal doesn’t “control its own monetisation destiny”. Yes it has enormous (but gradually diluting) leverage because Spotify and the other DSPs can’t exist without its catalogue. But that catalogue is a loss leader for Spotify. It isn’t therefore vested in its success. Like a supermarket that can’t not have Heinz baked beans or other household staples but doesn’t make any money on them. It stocks them but puts all its effort into directing customers to products where it CAN make a better margin. In Spotify’s case think podcasts, audiobooks or labels and artists that have opted into Discovery Mode - and so on. Rotem says: “What can UMG do…..? Aside from trying to squeeze out more economics from the platforms, nothing really, and the content leverage can only go so far.” I think this highlights a really important point for independent music businesses. You need to figure out where you can control your own monetisation destiny. Majors have dabbled in D2C but never taken it seriously. They have never invested properly in owning customer data and talking to them directly. Why? Perhaps because, as Rotem points out, management incentives weren’t well aligned and/or plain old complacency. But new businesses need not make that mistake. If you nail differentiation - if you actually stand for something and solve a problem for consumer - you will find fans of your label or publisher or live events etc And if you find fans you can monetise directly. Just like artists are realising super fans are the future - why shouldn’t that also be the case for new artist services businesses? UMG is fast becoming a catalogue acquisition and management business. Despite going on about being more artist centric, that’s just another name for trying to leverage better terms with DSPs. It doesn’t have the rights to persue more direct, premium relationships with the super fans of its top talent. And why would artists ever decide to grant those rights in future? Don’t fail to learn from these painful lessons and think hard about control of your own monetisation destiny. https://lnkd.in/eu9gJ-V7 #musicbusiness #businessmodel #taylorswift
