UMG LEANS INTO SUBS, SUPERFANS IN "STREAMING 2.0" VISION

At its Capital Markets Day presentation in London on 9/17, UMG's top execs presented investors with a new vision for revenue growth through 2028 that includes enhanced subscriptions, superfans and strategic partnerships.

Led by Sir Lucian Grainge, UMPG's Jody Gerson, UMG's Boyd Muir and Michael Nash, Republic CORPS' Monte Lipman and Jim Roppo, ICLG's John Janick, Steve Berman and Michele An and Virgin's JT Myers and Nat Pastor, the execs explained how UMG is preparing for "streaming 2.0." UMG intends to grow streaming revenue at a 8-10% year-over-year rate for the next four years.

Muir highlighted a "super-premium" subscription plan already in development with Spotify, noting that superfans are "the most avid 20% to 30% of all music listeners [and] once drove more than 70% of recorded-music spending." A single streaming tier, "or all streams being equal," has equalized monetization among fans, flattening the revenue generated by streamers while allowing other problems—gaming the DSPs, for one—to creep in. Initiatives are in the works to drive consumers to paid subscriptions.

A key component of the growth strategy will be expanding artists' audiences on social media, gaming and fitness platforms. In August UMG and Meta expanded their relationship to do just that and in 2023, the group partnered with Roblox and game company Supersocial on Beat Galaxy. UMG also highlighted its recent pact with TikTok.

The Capital Markets Day presentation further cited rapid-growth markets like Japan, India and the Middle East, as well as the success UMG is already having with D2C via acts like Olivia Rodrigo.