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Universal Music Group tunes up additional billions to win talent

The Future. Universal Music Group revealed that it has stepped up the amount of cash advances it provides its artists. The continuing increases are meant to keep artists happy, especially those who may be eying smaller outfits with more equity options, or who are thinking about going totally independent. The direct-to-fans nature of social platforms is transforming how music contracts are being done… meaning places like UMG may have no choice but to up revenue share if they want to stay relevant.

Culture cost
Universal Music Group (UMG) is going to need a bigger checkbook.

• The music company has doubled the amount of money it’s pouring into artists and songwriters.
• Artist advances cost $2.2 billion in 2020, as opposed to only $1.2 billion in 2018.

The company, which is worth north of $41 billion, revealed the numbers in a prospectus ahead of its public listing in Amsterdam next week.

Singer’s market
Analysts say that competition from smaller, upstart services are the biggest causes of UMG’s upped expenditures. These services give artists more control and ownership over their music, which leads to bigger paydays if their music hits.

When artists look at musicians like Frank Ocean and FKA Twigs and see what they’ve accomplished by staying independent, that path suddenly looks very enticing. UMG hopes that being generous keeps artists, such as Kanye, in the fold.

But signing with UMG still has major benefits. Nine out of the top ten selling artists last year were represented by the label.