In discussing the monetization potential of a relatively new platform like TikTok, Universal Music head Lucien Grainge said, “We've seen this movie before,” and said he believes the long-term potential for revenue expressed confidence in UMG's ability to secure a significant portion of the
Lucian Grainge, 62, who took an apparently healthy salary cut last year, explained his views on the subject during UMG's third-quarter earnings call. Despite reportedly huge losses for parent company ByteDance and ongoing concerns about user privacy, the wildly popular TikTok continues to generate significant revenue and become an important player in the modern music world. plays a role.
Additionally, ByteDance plans to expand TikTok's music presence by this time in 2022, including debuting a distribution service called SoundOn and a discovery and collaboration tool called StemDrop (with support from Universal Music). We have been working on this quite prominently.
Returning to UMG's assessment of the revenue potential associated with TikTok, especially amid reports that the short-form app plans to expand into streaming and other new platforms, Michael Nash, vice president of digital strategy, said: He highlighted ongoing plans for his business to “license to early-stage partners.” And we will complete a “win-win partnership.”
“But in terms of our current relationship with TikTok,” said Nash, a UMG executive who has worked there for about eight years. Collaborate with artists and have a seat at the table regarding the platform's roadmap for these services. ”
Meanwhile, as first noted, Grainge elaborated that he has “seen this movie before” and intends to negotiate a fruitful partnership with TikTok (and various video sharing and social players) in the near future. He said that. And to demonstrate the point, the London native compared UMG “as his YouTube company 10, 12, 15 years ago” to now. In September, the Google subsidiary announced it paid out $6 billion to the music industry in the 12 months ending June 2022.
“If you look at what the TikTok funnel looks like, the billions of views, I think the company has a growth rate, but we don't know how artists get paid and how we… When they get paid the same way they've been doing throughout the industry for years. I've seen this movie before and I know how it ends.”
And on similar fronts, UMG has signed licensing deals in the first 10 months of 2022 with African streaming service Mdundo, streaming and discovery platform Audiomack, app-focused music integration company Songclip, revamped LimeWire, and more. tied.
Most recently, UMG posted a 13.3% year-over-year revenue increase in the third quarter, with subscription revenue approaching $1 billion for the three-month period.
