HITS Daily Double


DOUBLE VISION: Having reconfigured his UMG universe, Sir Lucian Grainge is now better positioned to dedicate himself to such challenges as rejiggering the streaming-compensation paradigm, doing battle with TikTok (about which more below) and outlining best practices as AI becomes an increasingly prominent issue.

FYTEDANCE: Sir Grainge—surely relishing the inclusion of the label group on Fast Company’s list of 2024’s most innovative companies (where it’s ranked #1 among music companies)—appears better situated to weather the TikTok wars than even the most sanguine observer might have imagined. A recent Wall Street Journal story reported that the mighty TikTok’s growth is slowing for the first time in its history, with average monthly users aged 18-24 declining by 9% or so in 2023 and time spent on the app growing by just 1%. It’s also noteworthy that Uni has ported a number of promotional campaigns for top artists to Instagram, which grew by 10% last year. Spotify grew dramatically over the last year as well and is touting a record $9b in payouts to the biz. Wonderers also wonder if Spotify’s editorial support is doing more than expected to offset the absence of TikTok for some top acts. File under: The enemy of my enemy is my friend.

More to the point, two significant UMG releases—from Republic’s Ariana Grande and Interscope/MCA Nashville’s Kacey Musgraves—have overperformed in their opening frames without TikTok support. These encouraging results suggest that the impact of the Uni withdrawal from the platform may be less consequential for its bottom line than some feared. It should also be noted that the company’s major acts are still appearing on the platform and promoting their brands, but without their music.

RIGHT PLACE, RIGHT TIME: With the newly expanded Republic Corps in the East and Interscope Capitol Labels Group in the West, we see the expansion of two distinct visions. House Lipman, with the redoubtable Jim Roppo as chief lieutenant, extends its shared-services model to include Tunji Balogun’s Def Jam, while the enlarging of John Janick’s empire involves the absorption of the entire Capitol Music Group, newly fronted by Tom March and Lillia Parsa.

From where Sir Lucian sits, the combination of these coastal captains is the perfect mix, complementing one another and ideally positioned to grab an ever-greater piece of a dynamic, rapidly evolving market that—because of its global nature—offers exposure to a greater variety of music than ever before. Between them, the two new groups control an astounding 27%+ market share—14.1 in current for House Lipman and 14.7 overall for House Janick.

Monte has built an empire on the superstar power of acts like Taylor Swift, Morgan Wallen, Drake, Ariana Grande, The Weeknd and homegrown Noah Kahan, extending his reach with ultra-shrewd dealmaking, while Janick has invested in scaling up the artist-development vision he first sketched out as an indie entrepreneur, lifting artists like Billie Eilish and Olivia Rodrigo—the latter’s deluxe album, with five cuts not previously available for streaming, dropped last week—to ever-greater heights (with invaluable assistance from creative exec Michelle An and crew). Janick and team have proved especially adept at finding branding opportunities on which to partner with their artists, including movies, TV and sponsorships.

One fascinating example of that vision: Janick’s having positioned himself in the middle of the deal for youthquake media platform Complex, which was purchased by the NTWRK e-commerce collective in which UMG is a co-investor (alongside Goldman Sachs and Jimmy Iovine, among others); Janick, Iovine, Steve Berman and Complex NTWRK CEO Aaron Levant, among others, are part of the leadership group of the newly merged entity, and it so happens that IGA and Capitol Music Group, just prior to their own merger, were announced as the first companies to partner with said entity. But the rebranded, rebooted Complex will be open to all comers, who will now have a powerful new tool to directly connect their artists, brands and associated wares directly with a huge and active audience of consumers.

GOING TO THE WELL: The high profile of the new Kacey Musgraves project speaks to the growing involvement of the coastal majors in the booming country business, a genre that was once left almost entirely in the hands of their Nashville outposts. With the rise of Morgan Wallen and Zach Bryan, that’s all changed. Janick’s fruitful collaboration with Cindy Mabe’s UMG Nashville on Musgraves’ Deeper Well project is the product of a typically canny partnership, much as the establishment of Nir Seroussi’s Miami division has proved to be with respect to the Latin marketplace, as demonstrated by the breakaway success of KAROL G, for starters.