🔵 Is it time Universal's market share was reviewed?

The music giant ownership, influence and reach keeps growing, but how much is too much?

Recently I’ve covered Universal a fair bit. It is hard not to; the company keeps striking deals and making moves that inevitably generate headlines.

Thanks to its dispute with TikTok, we are now seeing just how far Universal’s reach extends. As I mentioned last week, even artists like Killer Mike (disclosure: I work with Mike, his label and management) are seeing their music pulled, not because they are signed to Universal, or because they have a publishing deal with the company, but because their music is distributed by Universal in some manner.

Yesterday, news emerged that Universal had acquired a minority stake in Chord Music Partners for around $240M. According to MBW’s article, “Chord’s portfolio includes works from artists and songwriters, including The Weeknd, Ryan Tedder/OneRepublic, David Guetta, Lorde, Kid Cudi, Diplo, Jimmy Jam & Terry Lewis, Ellie Goulding, ZZ Top, John Legend, Twenty One Pilots and many more.”

As part of the deal, Universal will also “will globally administer publishing and distribute recordings for Chord’s existing catalogs, which contain more than 60,000 music copyrights.”

In addition to owning 25% (or thereabouts) of the business then, Universal will also get to handle the recordings themselves.

All in all, not a bad bit of business for music giant.

At what point is this all too much though? What line does Universal have to cross before someone points out that its market share is now too large, and warrants review?

Of late I’ve felt like Universal’s M.O. has had a similar hallmark. Rather than acquire businesses outright, it instead purchases minority stakes. Prior to that, it can often announce strategic partnerships. Certainly that was the case with PIAS: a “strategic alliance” was announced back in June 2021, before the acquisition of 49% of the company was later confirmed by Universal in November 2022.

Interestingly, the same kind of language has been used around Universal’s relationship with BMG. An alliance was announced in November 2023, leading me to wonder if a sale to Universal might be on the cards there soon. Staff redundancies are often another indicator of a company being trimmed down to size ahead of an exit, and yes, that’s been happening with BMG too. Just me thinking aloud here.

Even if Universal’s ownerships stretch a long way then, one might argue that its influence among partners goes further still. This is where I feel the “artist-centric” (in quotes if only because I wouldn’t say it is actually artist-centric) debate has succeeded in entirely detracting from the user-centric model.

Universal’s preferred remuneration model, now in effect on Deezer, and arguably responsible for Spotify’s decision to no longer pay artists getting less than 1,000 streams per annum - which, lest we forget, is a long tail of affected artists - has fundamentally succeeded in choking out the user-centric model.

And yet, all signs suggest that if we look at SoundCloud, the only DSP who has the user-centric model in place, it is working extremely well.

I am mindful not to suggest that all indie labels (and even the other majors) would prefer the user-centric model; there is no question it does still present challenges. What I would argue though, is that Universal’s influence in this space is now becoming overbearing, and is choking out opportunity elsewhere.

I feel obliged too, to call BS on Universal’s repeated use of terms like “artist-centric”. You cannot define something as “artist-centric” if some artists are significantly worse off under a system that is essentially a reverse Robin Hood, i.e. taking from the poorest artists to give to the rich. It is a misnomer, aiming to suggest a benevolence that is simply not there.

Right now, Universal’s reach extends far. Too far, in my view, and its influence goes even further. Those deep pockets are slowly swallowing up indie spaces, and it is disrupting the landscape for the little guys who, ironically, often deliver the big artists of tomorrow (Beggars/XL and Adele anyone?).

So I ask again: how much is too much, and what can be done about that?

Have a great evening,

D.

📺 watching “The Alaskan 4th of July CAR LAUNCH - 300ft Extreme Jumps!” on YouTube. Thank my colleague Matt for this - 30-odd minutes of people launching cars off a cliff and down a steep hillside. Insane… and really watchable, LOL.

🤖 playing with Crew AI. Or at least, I’m trying to. Not being a developer I’m a little challenged on this front, but the concept is both crazy and amazing: role-based AI that can take turns to work together to deliver something. Confused? Check this video.

📖 reading JR Moores’ review of the new Gallagher Squire album. Now THIS is music journalism. Too many incredible quotes to pull, though one gem is simply “One of the best things about this album is that Ian Brown isn't singing on it” 😆

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Stories from the Music Industry:

Universal Music buys $240m stake in Chord Music Partners

Additionally, according to Tuesday’s announcement, UMG and Dundee Partners will enter into a new long-term strategic partnership to actively manage Chord’s rights through UMG’s global network and to acquire additional catalogs via Chord in the future. UMG will globally administer publishing and distribute recordings for Chord’s existing catalogs, which contain more than 60,000 music copyrights.

👆🏻Hot take: per the editorial above, I find myself wondering how many more quite investments and minority stakes Universal is allowed to make before they warrant investigation for monopolistic practices.

UK government rules out broadcast-style equitable remuneration for music

Both studies set about their work carefully and seriously, and are worth digging into, whether you agree or disagree with their findings. However, while they may have nixed the main reforms demanded by the ‘Broken Record’ campaign for now, the fact that both explicitly avoided analysis of whether the existing streaming model is ‘fair’ for musicians leaves room for more unrest as the music industry considers how its streaming economy should evolve in the next couple of years.

👆🏻Hot take: whilst I share the view that ER was perhaps not the solution here, the degree to which Universal have sunk the user-centric model - proven to be working well for SoundCloud - is worrying for a balanced and healthy ecosystem.

Apple Music testing feature that easily imports playlists from Spotify and other services

According to users on Reddit, there is a new prompt in Apple Music for Android that asks users if they want to “add saved music and playlists you made in other music services to your Apple Music library.” There’s also a new option for doing this through Apple Music’s settings on Android. This integration is powered by SongShift. Essentially, Apple appears to be integrating SongShift into the Apple Music for Android app to make it easier for users to switch from Spotify and other services to Apple Music.

👆🏻Hot take: a cheeky move here, though one I’m in favour of on the basis I hate the complexity involved in moving services.

Apple reportedly faces €500m fine from EU over music streaming access

The European Commission is investigating whether Apple blocked music streamers from telling users about cheaper ways to subscribe outside its app store where it takes a significant cut of revenues. According to the Financial Times, Brussels plans to impose a fine of €500m (£427m), which would represent a landmark ruling against Apple after years of complaints from companies whose services are delivered via iPhone apps.

👆🏻Hot take: potentially embarassing for Apple, not least because it might draw further scrutiny from the EU as to its practices in general.

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Stories from the Broader World of Tech:

FTC mulls AI rules to 'prohibit the impersonation of individuals'

“The Commission is also seeking comment on whether the revised rule should declare it unlawful for a firm, such as an AI platform that creates images, video, or text, to provide goods or services that they know or have reason to know is being used to harm consumers through impersonation.” That could be seismic, and you can expect some firm pushback from some of the biggest companies in the AI sector. The consultation period will last for 60 days.

👆🏻Hot take: IMO this is a no-brainer.

Reddit user content being sold to AI company in $60M/year deal

It’s being reported that a deal has been struck to allow an unnamed large AI company to use Reddit user content for training purposes … The deal is said to be worth around $60M per year, and comes at a time when the company is seeking to maximize its value in the run-up to an IPO. Bloomberg reports. The company is said to have disclosed the deal to prospective investors in its initial public offering (IPO).

👆🏻Hot take: it’s conflicting reading this. On the one hand it is good to see a site getting compensated for AI mining its content. On the other, that content is 100% user-generated, and those users had no say in this.

YouTube dominates TV streaming in U.S., per Nielsen’s latest report

Nielsen today released its January report on viewing usage across linear TV and streaming, which revealed that YouTube is once again the overall top streaming service in the U.S., with 8.6% of viewing on television screens. Netflix, meanwhile, saw 7.9% of TV usage. The new data points to YouTube’s dominance in the TV streaming arena and marks 12 consecutive months of the platform being in the top spot.

👆🏻Hot take: not a shock perhaps, but I still marvel at the amount spent on marketing on TikTok rather than YouTube.

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Need something else to read? Here you go:

‘Humanity’s remaining timeline? It looks more like five years than 50’: meet the neo-luddites warning of an AI apocalypse

From the academic who warns of a robot uprising to the workers worried for their future – is it time we started paying attention to the tech sceptics?

👆🏻Hot take: ignore the clickbait headline, this is a terrific piece looking at the growing number of people questioning whether we should be unquestionably accepting advancements in technology. To me it simply aligns with this growing sentiment that Big Tech is more like a drug dealer or a cult… neither of which are positive.

Ever wanted to play Mario Kart accompanied by a live jazz band? In Oklahoma, you can

In Oklahoma City, a five-piece band has been putting an authentic musical accent on local Mario Kart tournaments

👆🏻Hot take: oh yes - I want in on this!

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Exit Notes:

• This is the only edition of Network Notes this week. I have too much going on elsewhere which means my time to write is getting severely pinched, sorry. I am taking a view that I’d sooner write one decent edition a week than two mediocre ones, something I hope you all agree on. If not, let me know.

• Reprezent Radio have about 4 hours left on their fundraiser and are still about £4k short of their target. Once again I’d implore UK music industry folks to donate; these guys were supporting the likes of Stormzy and Ezra Collective way before anyone else, and we owe it to the community to ensure they can continue raising awareness of great artists. Donate here - and don’t delay; it closes at 6pm UK tonight!

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