Business Frame Weekly – Universal Music Group confirms job cuts/ Spotify formally unveiled its retooled royalty model

Universal Music Group confirms job cuts while 'investing in future growth'

TikTok parent ByteDance is shutting down its premium music streaming service

Spotify formally unveiled its retooled royalty model

In this newsletter:

• Universal Music Group confirms job cuts while 'investing in future growth'
• Spotify formally unveiled its retooled royalty model
• TikTok parent ByteDance is shutting down its premium music streaming service.
• European Music Managers Alliance expands partnership with YouTube Music
• Web3 streaming platform Tune.fm has disclosed “a $20 million commitment of capital” and plans to score major label licensing deals.
• UMG's Sir Lucian Grainge reveals expansion of artist-centric strategy by targeting superfans

January 16, 2024

Universal Music Group confirms job cuts while 'investing in future growth'

Universal Music Group plans to implement job cuts in the months ahead. Ahead of its financial results for 2023, UMG has confirmed plans for "efficiencies", following a report by Bloomberg. The music company had around 10,000 staff globally according to its annual report in 2022. The major’s decision to reduce the headcount follows similar moves at music, entertainment and tech companies, including Spotify, Amazon, Google and others. However, UMG is not about to make cuts on the scale of Spotify, which last month announced plans to reduce staff headcount by 17%. Warner Music and BMG have both implemented job reductions on a much lower scale. Universal Music reported revenue growth of 10% in Q3. CEO and chairman Sir Lucian Grainge spoke on the earnings call in October about the plan to reduce overheads in order to create growth in other parts of the business.

Spotify formally unveiled its retooled royalty model

Spotify formally unveiled its retooled royalty model (and plans for an early 2024 implementation) in November, setting in motion far-reaching revenue consequences for labels, distributors, and artists alike. The most noteworthy component of the revamped system, the aforementioned play minimum, will in practice block recording (but not publishing-side) payments for any track with fewer than 1,000 annual streams.While it has long been common knowledge that the pivot will effectively axe the on-platform recording revenue of many works, we now have a number – or at least an estimate – regarding the extent of the impact.

TikTok parent ByteDance is shutting down its premium music streaming service

TikTok parent ByteDance is shutting down its premium music streaming service Resso in India on January 31. A ByteDance spokesperson confirmed the news today (January 11), and told MBW that “unfortunately, owing to local market conditions, we can no longer continue to serve users of Resso in India”. They added: “We have therefore taken the decision to shut down Resso and its associated operations on January 31. Users will be offered a refund of their remaining subscription fees.”

European Music Managers Alliance expands partnership with YouTube Music

The European Music Managers Alliance (EMMA) has expanded its existing partnership with YouTube Music. It will benefit more than 2,000 managers based across Europe. Having worked closely with YouTube Music on its pan-European mentoring programme, the renewed partnership will help support EMMA’s ongoing work to provide professional development services to managers across the continent. It will also boost expert-led training and network building, and develop new research projects that will offer policymakers improved insights of how to support Europe’s music industry. The European music sector already supports an estimated two million jobs, and generates nearly a third of total recorded music revenues worldwide. Europe also represents one of the world’s most significant live touring markets.

Web3 streaming platform Tune.fm has disclosed “a $20 million commitment of capital” and plans to score major label licensing deals.

Tune.fm only recently revealed the multimillion-dollar tranche via social media as well as a formal release, with several crypto and blockchain publications having promptly covered the news from there.Founded in 2011 by brothers Andrew and Brian Antar – the latter of whom is CEO and holds the same position at companies called Promo Power Group and Shipmate Fulfillment – Tune.fm says its Hedera Hashgraph-built JAM token and adjacent “micropayments technology” afford artists “instant royalties” for on-platform streaming. The overarching model also enables creators to pull in between 10 and 100 times more royalties than they would on traditional services like Apple Music and Spotify, according to Tune.fm, which operates a music non-fungible token (NFT) marketplace as well.

UMG's Sir Lucian Grainge reveals expansion of artist-centric strategy by targeting superfans

Universal Music Group CEO & chairman Sir Lucian Grainge has promised an “extremely exciting and transformative year” for the company. In the UMG leader’s annual note to staff, which has been seen by Music Week, Sir Lucian reflects on the achievements of the major in the past 12 months, including its artist campaigns and the long-term industry initiatives around streaming and AI. “Once again, 2023 saw Universal Music lead the industry in all major financial and competitive performance metrics, at the same time our artists broke records and topped the charts around the world,” wrote Sir Lucian. “To put it succinctly: UMG is the most successful company in the history of the music industry and every one of us should be enormously proud of what we have accomplished together, let alone what I know we will accomplish going forward.” In 2023, UMG had six of the Top 10 global artists on Spotify: Taylor Swift (at No.1), The Weeknd, Drake, Feid, Karol G and Lana Del Rey.

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