Outside The Box - Inside UMG's Artist-Centric Revolution

Published about 2 months ago • 1 min read

Hey, Reader, it's Jerome -

Universal Music wants music streaming royalties.

With their new Artist-Centric Model unveiled last year, this initiative prompts us to consider its potential to enlarge the revenue share for non-major artists.

But what exactly is this new model?

Its core principles are straightforward:

  • Fair rewards for artists
  • Ensuring authenticity
  • Deepening the artist-fan connection

As the ecosystem grows and AI continues to evolve, UMG appears to be making the right moves.

But what’s really behind this?

Analysts from JP Morgan estimate that adopting this new model could lead to a 9% increase in subscription revenue.

They believe the model will benefit:

  • Major labels
  • Artist with highly engaging content

The essence of the model?

Highly engaging content.

Beyond revenue, this strategy is seen as a strategic response to AI-generated content, aiming to shift from volume to value-based pricing. This shift intends to preserve the worth of artist-driven, authentic content.

Once again, content—especially authentic, engaging, and long-form content.

So, is the artist-centric approach really here to help?

UMG isn't planning to lose out.

Rather, they're providing a blueprint for success based on highly engaging content and audience connection.

Goldman Sachs supports this in their reports, highlighting superfans as a critical growth area.

The artist-centric model promises a "clearer path towards improved monetization through structured, recurring price increases, and better terms with emerging platforms."

While "impressive", this isn't a revolution.

It’s an adaptation to current trends.

It seems likely that 2024 will witness more music companies doubling down on investment in superfan experiences.

But so, what’s the next big thing for the music industry?

Best,
Jerome

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