Universal music group

Learning Objectives
To consider the differences between independent labels
and
conglomerate labels
- To be able to analyse in the exam the benefits and limitations of each

Notes for case study

In groups of 4 you will adopt the role of a music institution. Some will be a conglomerate (Universal) and some will be an independent music company (Domino).
A new artist called ‘@ for Ampersand’ has requested that you produce and distribute the music for them. In your group you will have 3 mins to argue that you are the best institution for the job.
Step 1 Research your institution (notes in lessons)
Step 2 Plan your speech
Step 3 Write your speech and assign roles / sections to speak.
EVERYONE in your group must say something
EVERYTHING you say must be true and accurate.
Task

Universal Music Group
A global conglomerate

The largest of the ‘big four’ labels
Responsible for 30% of world music sales
Based in the US with offices worldwide
Owned by Vivendi (French media conglomerate)
Merged with BMG Music Publishing in 2007
Many subsidiary companies including Island Records Group, Decca, Polydor and Mercury
Revenue $5.87 billion in 2010
Key facts

Universal is the biggest of the four major record labels, responsible for 29% of the music sold in the world.
A global conglomorate
Has access to a global market – targets international audiences and manages artists with global appeal.
Is this always beneficial?
In summary…

Often the ‘majors’ or ‘conglomerates’ brand their output
as ‘independent’ by setting up or acquiring a separate company.
This is done by buying local record labels who sign local artists their marketing of global acts.
What is the benefit of selling music that is made ‘independently?
Being ‘outside the mainstream’ localizes the product and seems more personalised
It suggests that you able to offer something that is ‘alternative’ in some way (unlike all the others)
Independent Music Companies vs Conglomerates
in addition to

How do the majors operate?
Song writing and publishing
Major labels operate a vertically integrated business model, where the owner has acquired companies which play different roles in the process of creating, promoting and selling music.
Recording
Promotion & marketing
Licensing (to film/TV/mobile) e.g. Universal Pictures
Distribution e.g. Vivendi Distribution
Retail/exhibition
e.g. Virgin radio
Hardware e.g. Sony DVD players

What might be causing conglomerates like Universal Music Group to be loosing money?What are they doing about it?

Universal includes marketing and distribution branches which exist in order to
aggressively maximize catalogue repertoire
according to their website.
This means that branches of the company work hard to make sure that as much money is made from each artist as possible.
A vertically integrated company

Vivendi: stakes in music, film, TV, mobile, gaming and advertising.

Universal Music Publishing Group
A music publisher owns the copyright for music and lyrics and can licence them for use in film, TV, advertising, mobiles etc. as well as for other artists to cover.
UMPG is the largest in the world, with over 1 million copyrights.

In the computer room, use your blog to record your own research into the 6 ways in which Universal Music Group make their money (revenue).
You will find all the information you need on their website:
Task – period 5

To understand how Universal Music Group makes use of
‘Synergistic Marketing’
and
‘Secondary Licensing’
Learning Objective

A type of energy drink, made by Universal Music Group?
‘Cross-Promotion’ of media products for example the release of certain products simultaneously.
The type of energy created when a record label takes over a small independent label
What is Synergy?

Synergy and synergistic practices
What it means and how it relates to the music industry…

Definition:
The integration (combining) of institutions for mutual benefit.
For example the release of certain products simultaneously.
The industry calls this: ‘Cross-Promotion.’
Synergy

Example:
A film may be released at the same time as an associated CD soundtrack to produce maximum revenue.
Synergistic Practices

Definition:
The integration (combining) of institutions for mutual benefit. For example the release of certain products simultaneously. ‘Cross-Promotion.’

Definition:
The integration (combining) of institutions for mutual benefit. For example the release of certain products simultaneously. ‘Cross-Promotion.’
eg. Who had heard of ‘The Rembrandts’ before the series ‘Friends’ made the song so memorable?

Sony has a franchise in the music and film and game console industry.
It is easier for them to use synergistic practices to promote and sell their products because they are vertically integrated.
The potential for internal synergy is enormous!!
Vertical Integration

‘Quantum of Solace’ (Sony Pictures 2008)
Soundtrack by Sony:
‘Another Way to Die’ Alicia Keys’ – distributed by J Records (a subsidiary of Sony Records)
DVD and BlueRay Disk released film in HD
Console Game available on Sony Playstation 3
- Funded by ‘Sony Entertainment’
Internal Synergy

How is it an advantage to the music industry?
The music is more saleable because the audience is attracted to elements they recognise from the films.
The film is advertised by the music.
Everyone’s a winner!
Synergy

Sony Pictures could join with Sony Online Games to produce a ‘tie-in’ game/film to produce a greater market exposure for both products.
Sony Music could then release the soundtrack for both.
How could this work for a record label promoting a new music artist?
How does it work?

Girls Aloud – produced by Polydor Records (subsidiary of Universal Records)
Sang the soundtrack music to St Trinians – produced by Universal Pictures
http://www.youtube.com/watch?v=prKPXggt0t0&feature=fvst
Case Study: Universal Music GroupGirls Aloud

Music was used in a diet coke advert
http://www.youtube.com/watch?v=iUW8GrOIZcQ
Homework:
Create 2 more case studies on artists represented by Universal who have used synergistic marketing to promote their albums
Case Study: Universal Music GroupDuffy

A music publisher owns the copyright for music and lyrics and can licence them for use in film, TV, advertising, mobiles etc. as well as for other artists to cover.
UMPG is the largest in the world, with over 1 million copyrights.

What do they do?
concerned with the development, promotion and protection of the interests and rights of songwriters and composers.
manages the rights in the music
enables the music to reach its many audiences by..
encouraging record companies to record and release material and licensing works using synergistic marketing (i.e. agreeing the use of music in a film or advert) and print (sheet music).

Production:
Signed to Island Records after
takeover by Universal .
Worked with songwriting
& production company
Xenomania, Jay-Z’s production
company Roc Nation and several other producers and writers.
Artist case study: Sugababes

UK, Europe, Asian and US tours for new album
Theme song for Powderpuffs Girls Movie
ITV teen drama Girls in Love theme song
Tracks on soundtracks for Love Actually andSex and the City
Boots Christmas TV advert– Girls
http://www.youtube.com/watch?v=HgduIknGejU
Images licensed to Mattell for Barbie dolls
Promotion & secondary licensing

None of the original line-up remain – critics say they are now ‘more brand than band’ (The Independent)
New album Sweet 7 has sold relatively poorly in the UK and Europe – launch week is significant for sales.
Rumoured that Roc Nation has dropped the group from a contract due to poor European sales
Sweet 7 entered UK album charts at #14 March 2010 – first single had been released August 2009.
US release uncertain due to poor
European sales
Sweet 7 and brand controversy

Create 2 more case studies on artists represented by Universal to include:
Artist who has used synergy to promote their album
Artist who has sold ‘secondary licensing’ to help promote their music
Post on blog
Homework: for next Tuesday

http://mediadoodle.blogspot.com	85
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Universal music group

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Universal music group — Presentation Transcript