Music Business Sector Overview

The Universal Music Group is an American global music corporation that is also a subsidiary of Vivendi, a French media conglomerate. Its corporate headquarters is located in Santa Monica, California. Along with Sony Music and Warner Music Group, it is known as one of the Big Three. At one time, it was attached to the film studio Universal Pictures and its origin dates back the formation of the American branch of Decca Records in 1934. Decca Record spun off American Decca in 1939. In 1962, it merged with American Decca. The original organization was formed when Seagram, its parent organization bought PolyGram in 1998. It then merged it with Universal Music Group in the year 1999. MCA Music Entertainment Group was renamed to Universal Music Group in 1996 (Burmester, 354).

The leadership of the Universal Music Group has experienced major changes since its inception. For example, in 2011, Dough Morris stepped down as the CEO and Lucian Grainge, who was the former chairman of Universal Music Internal, was promoted to become the CEO of the company. As that shake up built up, Max Hole was appointed the COO of the Universal Music Group Company in 2010. The Universal Music Group acquired EMI in the 28th of September 2012. On November 8th of 2012, Hewlett-Packard and Universal Music held a launch of a marketing operation. In that feature, a customer could have access to music, and exclusive content from universal artists with an HP connected Music computer. With major improvements, Grace/Beyond and UMG agreed to the development of three new music-based television series. The series is known as 27, Melody Island and Mixtape and focuses on musicians at the age of 27 years. The series was based on the uplifting tropical island feel music with segments of the live craft.

Focus on Music Sector Overview

Owing to the robust nature of the internet to be open to everyone, piracy of music and video content has become a major challenge to artists. An interview with a worker in the Universal Music Group Company demonstrates how the issue of piracy has been a huge set back to the industry. The worker said that there are talented individuals and music and film companies coming up, but barely survive in the industry because, although their content gets a huge popularity, they are pirated. After their content is pirated, they lack the money to sustain the business, and within a short period, they are bankrupt. The staff at Universal Music Group Company says that the company is doing its best to curb the problem of piracy in the industry. The staff gave credit to the internet for the growth of the music and film industry, though. The emergence of the internet created an experience of consistent revenue and healthy profit margins from the sales from physical albums.

The market for music shifted record labels made attempts to adapt. The worker agreed that the streaming platforms such as Spotify and Apple Music are generating stiff competition for the digital downloads and physical album sales. However, the competition is quite manageable because the live streaming platforms generate less revenue for record labels than the physical sales of albums and digital downloads. Since there is a huge emergence of technology and software for the home-made content, the demand for the services of Universal Music Group and other production companies have greatly diminished. Many people have their media platforms in the social media sector. Therefore, the monopoly of the music and film industry that was previously enjoyed by Universal Music Group is slowly diminishing. Typical artists will create his/her own YouTube channel or Facebook page and utilize it for posting and developing his/her content that was probably created with a phone and edited using the appropriate software (Guo et al.). Many contents on the internet that has gone viral come from such informal production. In addition to that, a majority of the consumers of the art content such as music are on the internet and not the traditional mediums such as disks and televisions. To stay ahead, the Company is trying very hard to adapt to the digital landscape. That is also a measure that is used in combating falling album sales that is undermining the growth of the recording and production Company.

Analysis and Overview

Regardless of the medium through which the recording products are consumed, record businesses continue to make music, regardless. It goes without saying that streaming music services have eclipsed other channels for main label music distribution. The streaming music services are quickly over passing other methods for major label distribution of music, comprising 51.4 percent of the industry revenue. This is because of the unlimited access to catalogs of major majority labels and also the ease and affordability of mobile phones. The limited access to musical and film content is also an added advantage because consumers are fast shifting purchases of digital downloads for streaming the subscriptions from music content. For the major label music production industries to be successful in this internet age, it will need to have a good control of arrangements for distribution. In that way, the Companies will be able to secure a specific, reliable niche, thereby creating more demand for the content. In addition to that, the Universal Music Group should have a diverse range of clients. To capture, that, the Company should be able to create a market that meets the needs of a variety of audiences. For example, having contents for kids and also creating content for adults. The variety of content will create an increase in the demand and eventually the profit that the Company generates. In addition to that, the Industry should produce content that is currently favored by the market. In that case, the Company should create internet friendly content.

In addition to the above, Universal Music Group should create strong strategies for fighting piracy and theft of content. One of the ways it can achieve that is generating stronger legislation and IP rights. The Company should work closely law enforcement agencies to trace and identify online pirate services, litigate the perpetrators and engage judiciary systems and governments in the creation of an environment that is unfavorable to piracy (Shuker). The Company should also create advanced technologies that will identify and trace illegal distributions. The Company could tackle the collusion of providers of file-sharing technologies and the providers of illegal content by the development of new methods of watermarking that can easily trace the sources of illegal distribution. It could also work with online stores towards the removal of infringing applications while restricting their access to the illegal sites. The Company could also create awareness campaigns for the public.

References

Burmester, Alexa B., et al. "Accepting or fighting unlicensed usage: Can firms reduce unlicensed usage by optimizing their timing and pricing strategies?." International Journal of Research in Marketing 33.2 (2016): 343-356.

Guo, Hong, et al. "Effects of competition among Internet service providers and content providers on the net neutrality debate." (2015).

Shuker, Roy. Understanding popular music culture. Routledge, 2016.