UMG Head Lucian Grainge: Music Business Is on the Mend

Lucian Grainge - H 2015
Cassy Athena; Courtesy of Billboard

Lucian Grainge - H 2015

The Universal Music Group chairman spoke at the Code Media conference in Dana Point, Calif.

Universal Music Group chairman Lucian Grainge projected positivity during his appearance at the Code Media conference in Dana Point, Calif. on Feb. 18.

The music industry's most powerful executive, per the Billboard Power 100, says the business is transitioning to "a return to growth" and "a return to health," pointing to successful breakout acts like Sam Smith and monetization through a variety of digital income offers. The scars of piracy, he added, are in the past thanks to a focus on "recapturing the value of our investment."

Grainge spoke on the second and final day of the confab, which is run by website Recode and gathers a ballroom full of big brains from the tech industry. His appearance followed an announcement made earlier on Wednesday that UMG had signed a partnership agreement with new web video platform Vessel through which the company will exclusively premiere new music videos.

The license, Grainge said, falls in line with the entrepreneurial spirit of the company and its insistence on premium, rather than ad-funded, services. "I think it’s great," said Grainge of the rationale in teaming up with Vessel. "We create competition within the market [and it's] another example of experimenting with our artists for our artists to capitalize on our investment." (Worth noting: Vessel already has a deal in place with video hub VEVO, in which UMG is an investor.)

Expectations were tempered, however. "We’ll see how they’ll do," added Grainge. "But if we’re going to transition to premium subscription, it’s a great part of that journey."

The UMG chief pleaded ignorance when it came to plans by Apple to align itself with labels (he shot down a report that the company was interested in buying a label) as well as what Jimmy Iovine has in store. Asked about Jay Z's investment in Scandinavian streaming company Aspiro, Grainge offered that it was "purely about distribution." (Shockingly, Grainge pointed out, the CD still dominates in the second and third biggest markets, Japan and Germany.)

In general, he seemed less than enthused about the idea of tech companies coming into the music industry and potentially owning a label or musical archives. 

Putting the traditional, transactional model behind us is key to the future, added Grainge. "We want to accelerate paid subciptions and raise income and compensation for everyone. ... Ad-funded on demand will not sustain us or the entire ecosystem."