The Catalog and the Kingdom
In March 2023, a single concert tour — not a merger, not a streaming renegotiation, not a catalog acquisition — briefly added more than €3 billion to Universal Music Group's market capitalization. The Eras Tour belonged to
Taylor Swift, who belonged, contractually, to Republic Records, which belonged to UMG. But the economic chain between a woman singing in a stadium and the largest music company on earth was not merely a chain of contractual obligations. It was an argument about who, exactly, owns the value in recorded music — and whether the answer to that question has changed, is changing, or was never what anyone thought it was. UMG's enterprise value, hovering around €40 billion through much of 2024, rested on a paradox: the company had never been more profitable, never controlled more of the world's most-streamed music, never collected revenue from so many simultaneous sources — and yet the foundational asset, the song itself, had never been more contested as a site of economic power. Artists re-recorded their catalogs to escape old deals. Artificial intelligence threatened to synthesize new ones. Streaming platforms that once rescued the industry from piracy now squeezed per-stream economics toward a theoretical floor. UMG sat at the center of all of it, the largest music company in human history, holding roughly 40% of the world's recorded music market share and controlling a catalog that stretched from the Beatles to Bad Bunny, from Billie Holiday to Billie Eilish — and the question that hung over every earnings call, every licensing negotiation, every AI policy paper was whether scale in music was a permanent moat or a slowly melting glacier.
By the Numbers
Universal Music Group, 2024
€11.7BTotal revenue (FY2024)
~40%Estimated global recorded music market share
€2.0BAdjusted EBITDA (FY2024)
3M+Artists across catalog and active roster
70%+Revenue from streaming and subscription
€40B+Enterprise value (Amsterdam listing)
118 yearsAge of oldest predecessor label (Deutsche Grammophon, 1898)
The story of Universal Music Group is not — despite the impulse of every corporate history — a story about a brilliant founder who saw the future. It is a story about a catalog. More precisely, it is a story about the compounding economic value of intellectual property when distribution shifts from atoms to bits, about the structural power of owning the largest collection of master recordings and publishing rights on the planet, and about the small number of people who understood, at critical junctures, that the catalog was the moat. Everything else — the artist development, the label branding, the streaming negotiations, the AI lobbying — was either a means of feeding the catalog or defending it.
The Fossils in the Vault
The entity that became UMG does not have a founding. It has an accretion. Like a coral reef, it was built over a century by successive organisms — labels, publishing houses, distribution companies — that attached themselves to one another through mergers, acquisitions, and corporate restructurings so baroque that even music industry historians lose the thread. The earliest predecessor, Deutsche Grammophon, was established in 1898 in Hanover, Germany, by Emile Berliner, the inventor of the gramophone disc. The Decca label followed in 1929. But the modern entity traces its corporate lineage most directly to the Music Corporation of America — MCA — a talent agency turned entertainment conglomerate that acquired Decca Records and its subsidiary labels in 1962, thereby gaining control of a catalog that included Louis Armstrong, Bing Crosby, Ella Fitzgerald, and, by extension, the entire early architecture of American popular music.
MCA was the creation of Jules Stein, an ophthalmologist from Indiana who started booking bands in Chicago speakeasies during Prohibition and built the most powerful talent agency in entertainment before pivoting to production and distribution. His successor, Lew Wasserman — a former theater usher from Cleveland who became, by the 1960s, possibly the most powerful man in Hollywood — engineered MCA's transformation into a vertically integrated media company. When MCA bought Decca in 1962, it was a conglomerate move, not a music strategy. The music was incidental to the television production, the theme parks, the real estate. But the catalog endured.
The name "Universal Music Group" did not exist until 1996, when Seagram — the Canadian liquor empire controlled by the Bronfman family — acquired 80% of MCA and rebranded the music division. Edgar Bronfman Jr., who had taken the helm of Seagram from his father, was a man possessed by entertainment. He sold Seagram's stake in DuPont — a $9 billion position in one of the most reliable industrial companies on earth — to fund the acquisition of MCA and, later, PolyGram, the Dutch music giant owned by Philips. The PolyGram acquisition, completed in 1998 for $10.4 billion, was transformative. It combined MCA's American catalog with PolyGram's European depth — Deutsche Grammophon, Decca Classics, A&M Records, Island Records, Mercury Records, Motown — creating the largest music company in the world by a wide margin.
The entertainment industry is the most exciting industry in the world. The returns are enormous if you get it right.
Bronfman got the entertainment but not the returns. In 2000, Seagram merged with Vivendi, the French water utility turned media conglomerate controlled by Jean-Marie Messier, a man whose appetite for empire was exceeded only by his inability to service the debt it created. By 2002, Vivendi was in crisis, Messier was ousted, and UMG — now the crown jewel of a collapsing conglomerate — nearly ended up sold to pay down Vivendi's obligations. It survived as a subsidiary. The catalog survived with it.
The Man Who Understood the Catalog
Lucian Grainge arrived at what would become UMG in 1986, when he joined Polydor Records in London as a 26-year-old A&R executive. He was the son of a record shop owner in North London — not Eton, not the Sorbonne, but the actual retail floor where consumers chose between one record and another. This origin story matters because it embedded in Grainge a conviction that would define his tenure: the music business was, at its core, a hits business, and the hits business was an artist business, and the artist business was a relationship business. Everything else was plumbing.
By 2011, Grainge was CEO of UMG. He had risen through the British labels — Polydor, then the broader Universal Music UK — signing or developing acts including the Bee Gees, ABBA (through catalog reissues), Amy Winehouse, and Sam Smith. He was not a corporate strategist in the McKinsey sense. He was a dealmaker and a talent spotter who understood, crucially, that the digital revolution was not the end of the music business but the beginning of a different kind of scale.
His first major strategic act as global CEO was the acquisition of EMI's recorded music division in 2012 for approximately £1.2 billion, purchased from Citigroup, which had seized the label from Guy Hands's ill-fated leveraged buyout vehicle, Terra Firma. EMI brought the Beatles, Pink Floyd, Coldplay, Katy Perry, and the deepest classical catalog in recorded music. European regulators forced UMG to divest Parlophone and several smaller labels — they went to Warner Music — but the core of EMI's catalog stayed. UMG now controlled an estimated 35–40% of the global recorded music market, a share it would maintain and, by some measures, expand over the next decade.
UMG's century of accretive catalog building
1898Deutsche Grammophon founded in Hanover, Germany.
1934Decca Records (UK) establishes American subsidiary; signs Bing Crosby, Louis Armstrong.
1962MCA acquires Decca Records and its catalog — enters the recorded music business.
1990MCA acquires Geffen Records (
David Geffen's label: Nirvana, Guns N' Roses).
1995Seagram acquires 80% of MCA for $5.7 billion.
1998Seagram acquires PolyGram for $10.4 billion — creates the world's largest music company.
2000Seagram merges with Vivendi; UMG becomes a Vivendi subsidiary.
The Near-Death and the Resurrection
To understand UMG's current dominance, you have to understand how close the entire recorded music industry came to irrelevance — and how the majors, UMG foremost among them, engineered their own rescue.
The numbers are stark. Global recorded music revenue peaked at approximately $23.3 billion in 1999, according to IFPI data. By 2014, it had collapsed to $14.2 billion — a 39% decline over fifteen years, driven almost entirely by digital piracy and the failure of the industry to offer a legitimate digital alternative that matched the convenience of Napster, LimeWire, and BitTorrent. CD sales, which had been the engine of the 1990s boom, cratered. Digital downloads via iTunes provided a partial offset but never replaced the lost revenue. The industry's collective response — suing individual consumers, deploying DRM that punished paying customers, and generally behaving as though the internet was a temporary inconvenience — was one of the great strategic debacles of the early 21st century.
The rescue came from an unlikely source: a Swedish startup called Spotify, founded in 2006 by
Daniel Ek and Martin Lorentzon. The majors — UMG, Sony Music, and Warner Music — initially resisted streaming. Then they embraced it, on terms they designed. In exchange for licensing their catalogs to Spotify (and later Apple Music, Amazon Music, YouTube Music, and others), the three major labels negotiated royalty structures that guaranteed them approximately 55–65% of streaming platforms' gross revenue, plus equity stakes in the platforms themselves. UMG received an estimated 5–6% equity stake in Spotify ahead of its 2018 IPO, a stake worth billions at the time of Spotify's listing.
This was the pivot. Between 2015 and 2024, global recorded music revenue grew from $15.0 billion to over $28.6 billion (IFPI 2024 data), surpassing the 1999 peak for the first time. Streaming accounted for the overwhelming majority of that growth, and the three major labels — controlling roughly 65–70% of the global market between them — captured the majority of streaming economics. UMG, as the largest, captured the largest share.
Our strategy is about maximizing the value of music across every platform, every territory, every format. The catalog is the foundation. Everything we build, we build on that foundation.
The streaming transition did something else, something structural and profound: it made the catalog more valuable, not less. In the physical era, a catalog album — anything more than two years old — generated diminishing revenue as it fell off retail shelves. In the streaming era, catalog music was always available, always discoverable, always generating micro-payments. Old songs didn't die; they accumulated plays in perpetuity. UMG's catalog — spanning from Robert Johnson's Delta blues recordings to Drake's latest release — became a kind of perpetual royalty machine, generating predictable, recurring revenue with zero marginal cost of distribution. By the early 2020s, catalog music (defined as recordings older than 18 months) accounted for approximately 50% of UMG's recorded music revenue, up from roughly 35% a decade earlier. The implications were enormous: half of UMG's revenue came from music that had already been created, that required no new A&R investment, no marketing spend, no tour support. It was, in financial terms, the closest thing to pure intellectual property rent extraction that exists in media.
The Republic Gambit and the Swift Paradox
No artist illustrates UMG's strategic position — and its vulnerabilities — more precisely than Taylor Swift.
Swift began her career at Big Machine Records, an independent Nashville label distributed by UMG. She signed her initial deal at fifteen, in 2005, and over the next thirteen years released six studio albums that collectively sold tens of millions of copies and transformed her from a country teenager into the most commercially dominant artist of her generation. Under the Big Machine contract, the label owned the master recordings. This is standard industry practice — the label funds recording, manufacturing, and promotion, and in exchange owns the masters, paying the artist a royalty (typically 15–20% of revenue for new artists, escalating for superstars). Swift's masters were owned by Big Machine, and when private equity firm Ithaca Holdings, controlled by Scooter Braun, acquired Big Machine in June 2019 for approximately $300 million, it acquired Swift's masters along with it.
Swift's public, incandescent response — she called the deal her "worst case scenario" and accused Braun of bullying — became the most visible artist-label conflict in the modern era. But the deeper significance was strategic. In November 2018, Swift had signed a new recording contract with Republic Records, a UMG label run by Monte Lipman and Avery Lipman. The deal reportedly included provisions for Swift to own her new master recordings — an extraordinary concession that signaled a structural shift in the balance of power between superstar artists and major labels. UMG, in signing this deal, was implicitly acknowledging that the economic calculus had changed: keeping Swift on the roster, even on less favorable terms, was worth more than losing her to a competitor or, worse, to independence.
Then Swift did something unprecedented. She announced she would re-record her first six albums — re-creating each one as a "Taylor's Version" to compete commercially with the originals she didn't own. Fearless (Taylor's Version) arrived in April 2021. Red (Taylor's Version) followed in November 2021, featuring the ten-minute version of "All Too Well" that became the longest song to ever top the Billboard Hot 100. Speak Now (Taylor's Version) and 1989 (Taylor's Version) followed in 2023. Each re-recording debuted at number one. Each siphoned streaming and sales from the original masters.
For UMG, the Swift dynamic was bivalent. On one hand, Republic Records was generating enormous revenue from Swift's new albums — Midnights (2022) opened with over 1.5 million copies sold in its first week, the largest opening week of the 2020s — and from the Eras Tour, which generated an estimated $2 billion in gross revenue across 2023–2024, the highest-grossing concert tour in history. UMG's publishing arm, Universal Music Publishing Group, also collected publishing royalties on Swift's self-written songs. On the other hand, Swift's re-recordings were a direct, public assault on the principle that master recording ownership is an inviolable asset — the very principle that underpinned the value of UMG's own catalog. If the most successful artist in the world could demonstrate that masters could be replicated and commercially superseded, what did that mean for every other master recording in UMG's vault?
The answer, at least so far, was: less than you might think. Swift's re-recordings worked because of her unique combination of fanatical audience loyalty, complete songwriting authorship, and a narrative of injustice that turned catalog replacement into a cultural crusade. Few other artists possessed all three ingredients. The masters in UMG's vault — recordings by artists who were dead, retired, contractually prohibited from re-recording, or simply not famous enough to justify the expense — remained insulated from the Swift playbook. But the precedent had been set, and the negotiating dynamics had shifted. Every major artist renewal now involved a conversation about master ownership that would have been unthinkable in 2010.
The Streaming Squeeze and the Spotify Standoff
UMG's relationship with Spotify — its largest single revenue source, accounting for an estimated 15–20% of total group revenue — was not a partnership in any meaningful sense. It was a codependent standoff. UMG needed Spotify to monetize its catalog at scale. Spotify needed UMG's catalog to retain subscribers. The question was which side had more leverage, and the answer kept shifting.
In 2020, Spotify reported that major label content accounted for approximately 87% of total streams on the platform. UMG's share of that — roughly 30–35% of all Spotify streams — gave it enormous negotiating leverage. But Spotify had leverage too. It was the dominant streaming platform globally, with over 640 million users by late 2024 (including 250 million+ premium subscribers), and its recommendation algorithms increasingly shaped discovery, meaning that an artist's visibility depended not only on the label's promotional machinery but on Spotify's editorial and algorithmic choices.
The 2024 licensing cycle produced a notable inflection. UMG and Spotify reached a new multi-year agreement in early 2024 that reportedly included two structural innovations: an "artist-centric" royalty model that would shift per-stream payments toward "legitimate" artists and away from low-quality uploads (ambient noise tracks, AI-generated filler, so-called "functional music"), and a new premium tier offering higher audio quality and potentially higher per-stream rates. UMG publicly celebrated the deal as a victory for artists and "real music." Spotify described it as a partnership to grow the overall market.
The subtext was more contentious. UMG was pressing for higher effective per-stream rates at a time when Spotify was finally achieving profitability — Spotify reported its first-ever operating profit in Q3 2023, after years of losses — and was eager to demonstrate margin expansion to public market investors. The tension between UMG's desire for higher royalty rates and Spotify's desire for higher margins was structural and irresolvable; any dollar that moved from one to the other was a direct transfer, not a shared gain.
We are committed to being the best partner for artists and labels. But we also need to build a sustainable business. Those goals are not in conflict.
They were, of course, in conflict. The entire history of music industry economics is the history of that conflict.
The Publishing Flywheel
If the recorded music division was UMG's engine, Universal Music Publishing Group (UMPG) was its quietly compounding second fortune. Music publishing — the business of owning or administering the rights to musical compositions (lyrics and melody), as distinct from recordings — generated approximately €2.0 billion in revenue for UMG in FY2024, representing roughly 17% of total group revenue but a disproportionate share of operating profit due to its lighter cost structure.
UMPG controlled or administered the publishing rights to an estimated 4 million compositions. Its roster included songwriters and composers spanning every genre and era — from the Gershwin estate to Adele, from Brandi Carlile to Post Malone. Under the leadership of Jody Gerson, who became chairman and CEO in 2015 (the first woman to run a major music publishing company), UMPG had grown aggressively through both acquisitions and A&R signings. Gerson, who had spent two decades at EMI Music Publishing and Sony/ATV before joining UMG, understood that the streaming economy amplified publishing revenue just as it amplified recorded music revenue — every stream generated both a master recording royalty and a publishing royalty — and that the publishing catalog, like the recorded music catalog, was a perpetual annuity.
The strategic beauty of vertical integration became apparent here. When UMG controlled both the master recording (through its labels) and the publishing rights (through UMPG) to the same song, it captured value from both sides of every stream, every sync placement, every radio play. For a significant portion of UMG's catalog, this was the case. The company was, in effect, double-dipping on its own intellectual property — legally, structurally, and enormously profitably.
The Vivendi Divorce and the Amsterdam Listing
For two decades, UMG had been trapped inside Vivendi, the French conglomerate that had lurched from crisis to crisis while UMG steadily grew. Vivendi's other assets — Canal+, Havas, Gameloft — were respectable businesses, but none had UMG's growth trajectory or global dominance. The music company's value was partially obscured by Vivendi's conglomerate discount, a problem that Vivendi's controlling shareholder, Vincent Bolloré, the Breton billionaire whose Bolloré Group held a roughly 30% stake, eventually decided to solve through separation.
On September 21, 2021, Vivendi distributed 60% of UMG's shares to its existing shareholders and listed the company on Euronext Amsterdam. Shares opened at approximately €25.25, valuing UMG at roughly €45 billion — making it one of the largest European IPOs of the year and instantly creating a pure-play music company that public market investors could, for the first time, value independently.
The listing was preceded by a series of strategic pre-IPO investments. A consortium led by Chinese tech giant Tencent acquired approximately 20% of UMG in two tranches (2020 and 2021) at a valuation of roughly €30 billion. Pershing Square, the hedge fund run by Bill Ackman, acquired a 10% stake for approximately $4 billion in the months before listing. These pre-IPO placements served a dual purpose: they validated UMG's standalone valuation and signaled that the smartest capital allocators in the world — Tencent, with its deep understanding of digital music monetization in Asia, and Ackman, with his track record of identifying durable competitive advantages — saw something structural in UMG's business.
What they saw was this: a company with a dominant and growing market share in an industry experiencing secular tailwinds (streaming penetration, global middle-class growth, emerging market smartphone adoption), operating with what amounted to an oligopoly structure (three major labels controlling ~65–70% of global revenue), and sitting on a catalog of irreplaceable intellectual property that appreciated with every new distribution platform. It was, in the language of value investing, a toll bridge — one that charged every car that crossed, and across which an increasing number of cars were driving.
The AI War
By 2023, UMG was fighting on a front that hadn't existed eighteen months earlier: artificial intelligence. Generative AI models — trained on vast corpuses of data that included, in many cases, copyrighted music — could produce synthetic songs in the style of UMG's artists, using voices that sounded indistinguishable from the originals. In April 2023, a track called "Heart on My Sleeve," generated using AI to simulate the voices of Drake and The Weeknd (both UMG artists), went viral on TikTok and streaming platforms before being removed at UMG's request. The track's creator, a user named "Ghostwriter," had demonstrated something that terrified the entire industry: the gap between a synthetically generated song and a professionally produced one was closing fast, and the legal frameworks to prevent it were nonexistent.
Grainge responded with the urgency of a man who understood that this was an existential threat to the catalog — the first genuinely existential threat since Napster. In a January 2024 open letter, he outlined UMG's position: AI could be a tool for creativity and a partner for artists, but only if it was developed with explicit artist consent, proper licensing, and robust copyright protections. UMG began pulling its catalog from platforms that did not provide adequate AI safeguards, most notably engaging in a brief but public licensing dispute with TikTok in early 2024, during which UMG's entire catalog was temporarily removed from the platform over concerns about both royalty rates and TikTok's AI policies.
The TikTok dispute lasted approximately three months before a new licensing deal was reached, reportedly on improved terms for UMG. But the episode revealed the stakes: UMG was willing to sacrifice billions of promotional impressions — TikTok was the single most important platform for new music discovery, particularly for younger audiences — to defend the principle that its intellectual property could not be used without authorization and fair compensation. It was a negotiating tactic, but it was also a philosophical position: the catalog was inviolable.
We must protect human artistry. We will not allow our artists' life's work to be ingested by AI platforms without consent, credit, and compensation.
The AI question remained unresolved. Legislation was moving slowly in the U.S. and EU. The technology was moving fast. UMG's bet was that copyright law, properly enforced and potentially expanded, would protect its catalog just as it had (eventually) protected it from piracy. The history of the internet suggested this was partly right and partly naive — the law always catches up, but the gap between technological disruption and legal response is where value gets destroyed. For UMG, the question was how much value would evaporate in that gap.
The Geography of Attention
UMG's global reach was not merely a function of catalog breadth. It was a function of local market dominance, built through decades of investment in regional A&R operations that identified and developed artists for domestic markets before, in some cases, projecting them globally.
The Latin music explosion of the late 2010s and 2020s was, in many ways, a UMG story. Bad Bunny, the Puerto Rican reggaeton artist who became the most-streamed artist on Spotify for three consecutive years (2020–2022), was signed to Rimas Entertainment, distributed globally by UMG. J Balvin, Karol G, Daddy Yankee — the roster of Latin artists riding the genre's breakout was heavily UMG-aligned. UMPG's publishing arm similarly dominated the Latin songwriting space.
In K-pop, UMG struck a joint venture with HYBE, the South Korean entertainment company behind BTS, in 2021. The partnership aimed to develop new K-pop acts for global audiences, leveraging HYBE's trainee system and fan infrastructure with UMG's global distribution and marketing apparatus. The BTS relationship was complex — the group's U.S. distribution was handled through various channels, and mandatory South Korean military service disrupted their peak commercial momentum — but the strategic intent was clear: UMG wanted to be the global distribution partner of choice for every emerging music market.
In Africa, UMG launched Def Jam Africa in 2020, extending the legendary hip-hop label's brand to the continent's burgeoning music scenes. Nigerian Afrobeats, South African amapiano, and East African bongo flava were among the fastest-growing genres globally, and UMG was positioning to capture the next wave of global crossover artists.
The pattern was consistent: identify markets where consumption was growing, establish local A&R presence, sign the best local artists, distribute them globally through UMG's infrastructure. Feed the catalog.
The Merchandising Machine and the Adjacent Bets
UMG's business extended beyond recorded music and publishing into a web of adjacent revenue streams — merchandising, brand partnerships, direct-to-consumer retail, and live event promotion — that collectively generated meaningful revenue and, more importantly, deepened the company's relationship with both artists and fans.
Bravado, UMG's merchandising and brand management division, was the world's largest music merchandise company. It designed, manufactured, and distributed merchandise for UMG artists and, increasingly, managed broader consumer brand extensions. In the streaming era, where per-stream royalties were measured in fractions of cents, merchandise became a critical revenue stream for artists — and Bravado's integration into UMG meant that the company captured margin on the physical goods that accompanied digital consumption.
UMG also owned or operated businesses in live events, film and television production (through its Polygram Entertainment successor entities and various production arms), and brand partnerships, where it brokered deals between its artists and corporate sponsors. The logic was straightforward: every point of contact between an artist and a consumer was a monetization opportunity, and UMG's scale allowed it to aggregate those opportunities in ways no independent label or artist manager could replicate.
The Private Empire
The music industry's structure is, at bottom, an oligopoly dressed in creative clothing. Three companies — Universal Music Group, Sony Music Entertainment, and Warner Music Group — control approximately 65–70% of global recorded music revenue and an even higher share of publishing. This concentration is unusual in media. Film has six major studios plus a growing constellation of streaming services. Television is fragmented across dozens of networks and platforms. Book publishing, after the Penguin Random House / Simon & Schuster merger was blocked, has five major houses. But music — recorded music, specifically — has three dominant firms, and the largest of them, UMG, is nearly twice the size of the third.
This structure is not an accident. It is the result of a century of consolidation — every merger, from MCA-Decca to Seagram-PolyGram to UMG-EMI — that concentrated master recordings and publishing rights into fewer hands. The catalog, once accumulated, was nearly impossible to replicate. You could not re-record the Beatles' original Abbey Road sessions. You could not recreate the specific performances that made Kind of Blue or Rumours or Ready to Die culturally canonical. The masters were unique artifacts, and their ownership conferred a form of permanent competitive advantage that more closely resembled land ownership than typical intellectual property.
Grainge understood this intuitively. His capital allocation strategy reflected it: invest in A&R to sign the next generation of artists (feeding new recordings into the catalog), acquire catalogs when the price was right (
Bob Dylan's publishing was sold to UMPG in a deal reported at over $300 million), defend the catalog from AI and piracy, and extract maximum revenue from every distribution channel. It was not a complicated strategy. It did not need to be. When you own the land, the strategy is simple: make sure people keep building on it.
The Weight of the Crown
In February 2024, Lucian Grainge was hospitalized and briefly stepped back from day-to-day duties for health reasons. The market's response was immediate: UMG's stock dropped several percentage points, a visceral reminder that for all the talk of catalog value and structural advantages, the market priced a significant portion of UMG's premium on Grainge's personal relationships, negotiating acumen, and strategic vision. He returned to full duties within weeks, but the episode crystallized a corporate governance question that UMG had not yet definitively answered: what was UMG without Grainge?
The bench was deep — Boyd Muir as CFO, Sir Lucian's longtime operational partner; the Lipman brothers running Republic; Jody Gerson at publishing — but the music business, more than almost any other industry, ran on personal relationships. Artists signed with people, not with logos. An A&R executive's rolodex was the label's most valuable non-catalog asset. And Grainge had been the personal relationship at the center of UMG's web for over a decade, the man who could call any manager, any artist, any platform CEO and get them on the phone.
Succession planning was, by 2024, the silent topic in every analyst conversation about UMG. The company's official position was that it had a robust succession process. The market's unofficial position was that Grainge was irreplaceable, and that the gap between robust process and irreplaceable leadership was exactly where risk lived.
Thirty-Seven Cents
Here is a number that explains Universal Music Group: approximately $0.003 to $0.005. That is the estimated per-stream royalty rate paid by major streaming platforms to rights holders for a single play of a single song. At the upper bound, it takes roughly 200 streams to generate one dollar of revenue. For an artist receiving a 20% royalty from their label, those 200 streams yield twenty cents. For a songwriter receiving their share of the publishing royalty, the per-stream payment is smaller still.
UMG's entire business model — its €11.7 billion in annual revenue, its €40 billion market capitalization, its century of accumulated intellectual property — rests on the aggregation of those fractions-of-a-cent payments across billions of streams, millions of songs, and hundreds of millions of listeners, every day, in every country on earth. The catalog is the multiplier. Each additional song in the vault generates its own trickle of micro-payments, and the trickles compound into rivers. UMG's catalog — the largest in recorded music — generates more rivers than any other entity, and the rivers, once flowing, require almost no maintenance.
In fiscal year 2024, UMG's recorded music streaming revenue grew by double digits year-over-year, driven not by any single blockbuster release but by the cumulative effect of billions of streams across millions of catalog tracks. The Eras Tour boosted Taylor Swift's streams. A TikTok trend revived a thirty-year-old catalog track. A Netflix documentary soundtracked with UMG-owned recordings generated a spike in listening. Each event was individually small. Collectively, they were the business.
This was the machinery that Lucian Grainge built, or more precisely, that he inherited and optimized. On a wall in the UMG offices at 2220 Colorado Avenue in Santa Monica — a building that, in its previous life, was an aircraft factory — there is, reportedly, no grand architectural statement, no atrium with a waterfall. Just offices, and conference rooms, and servers, and somewhere, in a climate-controlled vault or a data center, the catalog: three million artists, millions of master recordings, stretching back more than a century, every one of them generating its fraction of a cent, every minute of every day.
