Universal Music Group

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Universal Music Group is one of the Big Three major record labels in the U.S., along with Sony BMG and Warner Music Group.

UMG is owned by Vivendi SA with company headquarters in Santa Monica, California, and New York, New York. Vivendi is a media conglomerate based out of Paris and owns properties in publishing, television, film, video games, and more. It completed its purchase of UMG in 2006.

Vivendi stated in June of 2019 that it was looking to sell 50% of UMG but that it was not in a rush to complete any deals. Officials told Variety they still were looking for the right partner to help manage UMG's growth.

History

Universal Records began as a relatively unimportant extension of the Universal Pictures Group, one of the most successful movie studios in Hollywood. Universal Pictures released soundtracks from their films on the Universal Records label. Throughout the years, however, Universal Records became an interest in its right and grew and evolved until it became the mega label it is today. It broke off entirely from Universal Studios in 2004 when General Electric purchased the film studio and merged with NBC.

The record label originally was known as Decca Records until it merged with MCA in 1962. Seagram acquired MCA in 1995, and the following year, the company adopted the name Universal Music Group with MCA continuing as a subsidiary. Seagram later purchased Polygram, which also became a subsidiary of UMG in 1999.

Subsidiaries and Artists

Sony BMG may be the biggest label in the world, but Universal is the top-selling label, according to the International Federation of the Phonographic Industry (IFPI). In addition to having branches of the Universal label in nearly every country in the world, Universal owns in whole or in part more than 100 labels. Some of these subsidiary labels are among the best-selling and most recognizable names in music in their own right.

UMG's list of subsidiaries includes Abbey Road Studios, Interscope, Geffen, Motown, Def Jam, Island, EMI, Verve, and more.

Many of the labels Universal owns also have their own sets of subsidiary labels.

The labels that fall under the Universal Music Group umbrella represent an eclectic mix of music genres, and the artists on these labels often are some of the top-selling artists in their genres. Artists signed to Universal Records or a Universal Music Group label include Gwen Stefani, 50 Cent, Marian Carey, U2, Kanye West, and many more.

Digital Music

UMG helped launch Vevo in 2009. The video hosting service distributes ad-supported music videos via YouTube. Google, which owns YouTube, shares in the advertising revenue as part of the arrangement. All of the Big Three record labels have made their music available to Vevo since 2016.

Overall, music streaming accounted for about 61% of UMG's revenue for the first quarter of 2019, as reported by Vivendi.

Streaming revenue includes music purchased individually or through subscriptions for Spotify, Apple Music, Amazon Music, YouTube, and other streaming services. The growth of digital music translated to revenue that was 24% better than the first quarter of the previous year for UMG.

Controversy

UMG has not been without controversy throughout its history, finding itself on the wrong side of some high-profile cases. The Federal Trade Commission accused UMG and other music labels of fixing prices on CDs between 1995 and 2000, launching an investigation in August of 2000. More than 40 states joined in suing the music labels and several record store chains for the alleged price-fixing. UMG never admitted responsibility but agreed along with the other defendants to contribute to a settlement that included $67.4 million in fines and $75.7 million worth of CD donations to nonprofit organizations.

In 2006, UMG paid a $12 million fine to the state of New York to settle a payola investigation launched by then-New York Attorney General Eliot Spitzer the year before. According to the court case, Universal paid overhead costs for some radio stations, had employees phone in bogus song requests, and paid a hotel bill for a DJ in return for playing songs by artists including Nick Lachey, Ashlee Simpson, Lindsay Lohan, and others. After much back and forth, Spitzer's office and Universal reached a settlement in which Universal top brass blamed "independent promoters working on behalf of the company" for the payola practices.

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