|Industry||Music & entertainment|
|Founded||1934 (as Decca Records USA)
1989 (MCA Music Entertainment Group formed)
1996 (first UMG incarnation from MCA Records)
1998 (second UMG incarnation from PolyGram)
|Headquarters||Santa Monica, California United States|
|Key people||Lucian Grainge: Chairman & CEO
Boyd Muir: CFO
Max Hole: Chairman & CEO of UMG International
|Revenue||$6 billion (2010)|
Universal Studios (1996–2006)
|Divisions||List of Universal Music Group labels|
Universal Music Group (UMG Recordings, Inc.) (UMG) is the largest music corporation in the world. An American-based, French-owned multinational music corporation, it currently operates as a subsidiary of Paris-based media conglomerate Vivendi. UMG also owns Universal Music Publishing Group, which is the second largest music publishing company in the world. Universal Music Group's global corporate headquarters are located in Santa Monica, California.
Universal Music was once the music company attached to film studio Universal Pictures. Its origins go back to the formation of the American branch of Decca Records in 1934. The Decca Corporation of England spun American Decca off in 1939. MCA Inc. merged with American Decca in 1962. The present organization was formed when its parent company Seagram purchased PolyGram and merged it with Universal Music Group in 1998. However, the name first appeared in 1996 when MCA Music Entertainment Group was renamed Universal Music Group. The PolyGram acquisition included Deutsche Grammophon which traces its ancestry to Berliner Gramophone making Deutsche Grammophon UMG's oldest unit. UMG's Canadian unit traces its ancestry to a Berliner Gramophone breakaway firm the Compo Company.
With the 2004 acquisition of Universal Studios by General Electric and merging with GE's NBC, Universal Music Group was cast under separate management from the eponymous film studio. This is the second time a music company has done so, the first being Time Warner and Warner Music Group completely separating from each other. In February 2006, the label became 100% owned by French media conglomerate Vivendi when Vivendi purchased the last 20% from Matsushita, the group's sole owner from 1990 to 1995 and co-owner from 1995 to 2006. On June 25, 2007, Vivendi completed its €1.63 billion ($2.4 billion) purchase of BMG Music Publishing, after receiving European Union regulatory approval, having announced the acquisition on September 6, 2006.
Doug Morris stepped down from his position as CEO on January 1, 2011. Former chairman/CEO of Universal Music International Lucian Grainge was promoted to CEO of the company. Grainge later replaced him as chairman on March 9, 2011. Morris became the next chairman of Sony Music Entertainment on July 1, 2011. With Grainge's appointment as CEO at UMG, Max Hole was promoted to COO of UMGI, effective July 1, 2010. Starting in 2011 UMG's Interscope Geffen A&M Records will be signing contestants from American Idol/Idol series. On January 2011, UMG announced it was donating 200,000 master recordings from the 1920s to 1940s to the Library of Congress for preservation.
In March 2011, Barry Weiss became chairman & CEO of The Island Def Jam Music Group & Universal Republic Records. Both companies are in the process of restructuring under Weiss. In December 2011, David Foster was named Chairman of Verve Music Group.
On 12 November 2011, it was announced that EMI would sell its recorded music operations to Universal Music Group for £1.2 billion ($1.9 billion) and its music publishing operations to a Sony-led consortium for $2.2 billion. Among the other companies that had competed for the recorded music business was Warner Music Group which was reported to have made a $2 billion bid. However, IMPALA has said that it would fight the merger. In March 2012, the European Union opened an investigation into Universal's purchase of EMI's recorded music division and has asked rivals and consumer groups whether the deal will result in higher prices and shut out competitors. Coincidentally, UMG sister company StudioCanal has owned the EMI Films library for several years now.
On 21 September 2012, the sale of EMI to UMG was approved in both Europe and the United States by the European Commission and Federal Trade Commission respectively. However, the European Commission approved the deal only under the condition that the merged company divest one third of its total operations to other companies with "a proven track record in the music industry". UMG divested Mute Records, Parlophone, Roxy Recordings, MPS Records, Cooperative Music, Now That's What I Call Music!, Jazzland, Universal Greece, Sanctuary Records, Chrysalis Records, EMI Classics, Virgin Classics and EMI's European regional labels in order to comply with this condition. The Beatles' recorded music library was allowed to remain with UMG despite being considered part of Parlophone and is now managed by UMG's reorganized Capitol Music Group worldwide. Robbie Williams, who had previously recorded for Chrysalis, had his catalogue transferred to Universal's Island Records.
Universal Music Group completed their acquisition of EMI on September 28, 2012. In November 2012, Steve Barnett was appointed Chairman & CEO of Capitol Music Group. He formerly served as COO of Columbia Records. In compliance the conditions of the European Commission after purchase of EMI, Universal Music Group sold a German-based music rights company BMG the Mute catalogue on December 22, 2012. Two months later, BMG acquired Sanctuary Records for close to 50 million euros.
On February 8, 2013, UMG sold to Warner Music Group the Parlophone Music Group consisting of Parlophone Records, Chrysalis Records, EMI Classics, Virgin Classics and EMI Records' Belgian, Czech, Danish, French, Norwegian, Portuguese, Spanish, Slovak and Swedish divisions, to a value of $765 million (£487 million). Play It Again Sam acquired Co-Operative Music for £500,000 in March 2013. The previous month, Sony Music Entertainment acquired Universal's European share in Now That's What I Call Music for approximately $60 million. With EMI's absorption into Universal Music complete, its British operations will consist of five label units: Island, Polydor, Decca, Virgin EMI and Capitol.
On April 2, 2013, the gospel music divisions of Motown Records and EMI merged to form a new label called Motown Gospel. On May 2013, Japanese company SoftBank offered 8.5 billion US dollars to Vivendi for the acquisition of UMG, but Vivendi rejected it. On November 14, 2013, Universal Music will now distribute Warner Music's releases in the Middle East as a result of the integration of EMI's branch in the said region.
On April 1, 2014, Universal Music announced the disbandment of Island Def Jam Music, one of four operational umbrella groups within Universal Music. Universal CEO Lucian Grainge said of the closure, "No matter how much we might work to build ‘IDJ’ as a brand, that brand could never be as powerful as each of IDJ’s constituent parts." Effective as of the same day of the announcement, Island Records and Def Jam will now operate as autonomous record labels. David Massey and Bartels, who are worked respectively at Island and Def Jam Records, will lead the new record labels independently. Barry Weiss who previously moved from Sony Music to head up Island Def Jam Music back in 2012 when Motown Records was incorporated into Island Def Jam has stepped down from Universal Music. Additionally, as part of the changes to the labels, Motown Records will be transferred to Los Angeles to become part of the Capitol Music Group - previous Vice President Ethiopia Habtemariam was promoted to Label President for Motown Records. Republic Records now operates independently while the Interscope Geffen A&M group remains unchanged.
Universal Music Group co-developed Vevo, a site designed for music videos inspired by Hulu.com, which similarly, will allow for free, ad-supported streaming of music videos and other music content.
The UMG main global headquarters are located at 2220 Colorado Avenue in Santa Monica. The Santa Monica headquarters oversees all of its legal obligations in the US and Canada such as Human Resources, and any legal issues surrounding the company. Interscope-Geffen-A&M and Verve Music Group are based at their LA headquarters with Jimmy Iovine heading Interscope-Geffen-A&M and David Foster heading Verve. The Island Def Jam Music Group has some offices at the Santa Monica headquarters. The building is also home to Universal Music Enterprises (UME). UMG Chairman & CEO Lucian Grainge works out of the company's Santa Monica headquarters. Universal Music Publishing is headquartered at 2100 Colorado Avenue, which is down the block from UMG's offices.
UMG has a major workforce in New York City. UMG's New York City headquarters deals mainly with Universal's marketing, Information Systems, and finance. It is also where several of UMG's labels are headquartered. Island Records, Def Jam Records, Republic Records, Decca Label Group, A&M/Octone and the newly re-launched Geffen Records and Kroszover Entertainment are all based in New York City.
Universal Music Group International (UMGI) is headquartered in High Street Kensington, London. UMGI manages UMG's offices in most countries outside of North America.
Universal Music Latin Entertainment is headquartered in Woodland Hills, California while Universal Music Group Nashville is headquartered in Nashville, Tennessee. Universal Music Group's parent company, Vivendi, is headquartered in Paris, France.
In May 2006, an investigation led by then New York attorney general, Eliot Spitzer, concluded with a determination that Universal Music Group bribed radio stations to play songs from Ashlee Simpson, Brian McKnight, Big Tymers, Nick Lachey, Lindsay Lohan and other performers under Universal labels. The company paid $12 million to the state in settlement.
In May 2007, UMG was accused of abusing the Digital Millennium Copyright Act in order to squelch criticism, by forcing YouTube to remove several videos that contain UMG's music in it. This has caused much anger and frustration to many YouTubers. One of the videos UMG took off is a Michelle Malkin video critical of singer Akon. Eventually, UMG backed off its claims after being challenged by the Electronic Frontier Foundation. In the same year, UMG was accused of using the Digital Millennium Copyright Act to indiscriminately remove content related to the artist Prince, most notably a twenty-nine second home video in which a child danced to one of Prince's songs.
In December 2007 UMG announced a deal with Imeem which allows users of the social network to listen to any track from Universal's catalogue for free with a portion of the advertising generated by the music being shared with the record label. Two weeks after the deal was announced Michael Robertson speculated on the secret terms of the deal and argued that ultimately this was a bad deal for imeem. This speculation lead to a flame war on the Pho digital media email list as imeem representatives denied his claims and dismissed his theories as unfounded. Imeem is a defunct website and all traffic was deferred to MySpace.
On December 9, 2011, Megaupload published a music video titled: "The Mega Song", showing artists including Kanye West, Snoop Dogg, Alicia Keys and will.i.am endorsing the company. The music video was also uploaded to YouTube, but was removed following a takedown request by UMG. Megaupload said that the video contained no infringing content, commenting: "we have signed agreements with every featured artist for this campaign". Megaupload requested an apology from UMG, and filed a lawsuit against the company in the United States District Court for the Northern District of California, on December 12, 2011. UMG denied that the takedown was ordered under the terms of the Digital Millennium Copyright Act, and said that the takedown was "pursuant to the UMG-YouTube agreement," which gives UMG "the right to block or remove user-posted videos through YouTube's CMS (Content Management System) based on a number of contractually specified criteria." The video was subsequently returned to YouTube, with the reasons for the UMG takedown remaining unclear. Lawyers for will.i.am initially claimed that he had never agreed to the project, but on December 12, he denied any involvement in the takedown notice.