$40bn float is just the start of growth – Universal chief

THE music industry’s most powerful executive has claimed Universal Music Group is ‘at the very beginning of the next wave of growth’ ahead of its $40 billion stock market listing this week.

Sir Lucian Grainge told The Mail on Sunday online music streaming had revived the sector and the Amsterdam listing of the label – home to Taylor Swift and Katy Perry – validated his determination to persist in an industry which had repeatedly been written off as doomed.

He hit back at suggestions that Universal’s stock market debut could be its peak as a business, saying: ‘I see a long runway ahead both for paid and ad-supported streaming.

‘And then when you look at all the new ways we’re generating revenue for artists – in games, health and social – and you combine that with opportunities to monetise socalled “superfans” in e-commerce, merchandise, non-fungible tokens and digital goods – it’s easy to see that we’re at the beginning of the next wave of growth.’ Grainge, 61, said the listing ‘represents a validation of the belief I’ve had in this industry since I began my career’. He added: ‘I can’t tell you how many times people told me the music business was over. Call me an optimist, but I just knew they were wrong.

‘So when in the face of a declining industry, when people were running for the hills, we doubled down on artist investments, on expanding globally, on acquiring amazing assets like EMI... I just knew it would come back.’

Grainge, who will net a £123million cash bonus from the listing, has led UMG for a decade and last year recovered from near death after contracting coronavirus.

The float comes at a delicate time for the UK music industry. After an inquiry into the streaming market, MPs on the Department for Culture,

Media and Sport select committee called for a ‘complete reset of streaming that enshrines in law [artists’] rights to a fair share of the earnings’ from streaming, claiming they receive ‘pitiful returns’. It recommended Government order a full investigation by the Competition and Markets Authority.

Grainge declined to discuss the inquiry, but said: ‘Streaming has fundamentally changed the industry’s financial profile and the size of the addressable market for music. Fans’ listening and engagement are increasing and, as the industry grows, the rewards of success for artists increase as well.

‘And we believe that we dramatically increase the odds for an artist’s success. The results speak for themselves.’ This week’s listing will see French conglomerate Vivendi spin out UMG. The newly-listed group will count American hedge fund manager Bill Ackman’s Pershing Square and China’s Tencent among its investors.