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Lucian Grainge, CEO of Universal Music Group (UMG), has reportedly sent a memo to his executives prohibiting them from signing exclusive distribution deals with streaming services, according to Bob Lefstetz’s influential industry newsletter cited by The Guardian reports.
If obeyed, Mr. Grainge’s dictum could derail a music streaming industry that has come to rely on exclusive artist releases as a user acquisition strategy.
UMG is one of the world’s big three record companies (along with Sony Music Entertainment and Warner Music Group), owning well over a hundred labels and sub-labels across the globe, and with stakes in scores more. A subset of its portfolio includes the Interscope, Def Jam, Republic, and Capitol record labels, which count stars like Kanye West, Taylor Swift, Adele and Drake in their rosters. Releasing content on as many platforms as possible makes sense for the record label because it maximizes the potential for song streams and thus royalty payments too.
Grainge’s directive would undermine music streaming platforms like Apple Music and Tidal, for whom exclusive releases are a key point of differentiation from the competition. For example, Frank Ocean’s long-awaited new album, Blonde, was released exclusively on Apple Music last week, as was Drake’s record Views earlier this year. On the same note, Tidal is the sole streaming home for Beyonce’s Lemonade in perpetuity, and Kanye West infamously caused a stir when he made the ultimately erroneous announcement that Life of Pablo would only ever be available on Tidal.
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