Universal Music Group Restructures Label System

UPDATE (Feb. 1):

Universal Music's CEO Lucian Grainge issued a letter to UMG employees on Thursday (Feb. 1) to announce the restructuring of its label operating model, as reported by Variety.

Grainge writes in the letter that the move was part of “the next powerful wave of [UMG’s] commercial and creative growth and success.” They added that Interscope Geffen A&M’s John Janick and Republic’s Monte Lipman would take on more responsibility and that the two would soon make, "further announcements about structure, resources and next-generation partnerships."

"I am certain that we will look back on today as a pivotal moment in the evolution of UMG, marking the start of the next powerful wave of our commercial and creative growth and success," the letter concludes.

See the entire memo below.

Dear Colleagues:

In my New Year’s note to you, I wrote of the many ways UMG is evolving to ensure that we continue our historic success.

One aspect of that evolution will be to design the organizational model and build upon the leadership team for the recorded music business of the future. Today we are taking the year’s first step toward doing so.

I’m proud of the fact that UMG has some of the most effective leaders in the music business. In the U.S., the world’s largest music market, Monte Lipman at Republic and John Janick at Interscope Geffen A&M (IGA) operate the industry’s two most successful label groups.

Year after year, they have been trading places in their battle for No. 1. In 2023, Republic held the top spot and IGA was No. 2. In fact, Republic has been so strong this year and last, that some weeks its individual market share alone exceeds that of other entire major music groups. Meanwhile, IGA has broken more global artists in recent years than any other label and leads the industry in 2024 Grammy nominations in the top categories.

The competition within our own company in signing and developing artists is no accident. It’s by design. By creating a home for a variety of independent and competitive creative centers and the leaders that run them, we increase opportunities for growth and success.

At the same time, our culture never lets our ‘in-house’ competition become destructive; our executives never forget that we are all part of the same UMG team. John and Monte consistently share strategies for success with our labels in the U.S. and around the world, strategies that benefit artists signed to all our labels, not just those on Republic and IGA.

Internally, we are as fiercely cooperative as we are competitive.

John and Monte bring to UMG unique and complementary skills in how they lead their organizations and how they envision positioning them for success in the future. To accelerate those strategies and maximize their effect, today I am appointing Monte and John to lead a broader part of our US recorded music business. Monte will continue to be based in New York and John in LA.

Under this new operating model, Monte and John will support our label heads and help them build best-in-class teams – powered by the industry’s most accomplished and forward-looking people. John will provide our labels including Blue Note, Capitol, Geffen, Interscope, Motown, Priority and Verve with unparalleled support, while Monte will do so for Def Jam, Island, Mercury and Republic.

As our labels continue to maintain their creative A&R and marketing independence, unique identities, and entrepreneurial spirit, they’ll also be provided with access to the talent and resources best able to support their rosters and bring them to new levels of success. It’s a proven model we pioneered on the East Coast several years ago—one that we will accelerate and expand.

As this model takes shape and spurs new creativity, our U.S. recorded music business will continue to outperform and outgrow our competition. Led by the industry’s best creative visionaries – we will cultivate more repertoire sources, we will invest more in new artists and emerging genres, and UMG will become an even more attractive destination for the world’s most gifted artists.

In the coming weeks, John and Monte will be making further announcements about structure, resources and next-generation partnerships. These and other developments will also power some of the other initiatives I outlined in my New Year’s note, including super-fan and audience monetization, state-of-the-art D2C, e-commerce, branding and more.

I am certain that we will look back on today as a pivotal moment in the evolution of UMG, marking the start of the next powerful wave of our commercial and creative growth and success.

The new year is only a month old, but, as I promised, it is already turning out to be an exciting one for our company.

Lucian

Original Story (Feb. 1):

Universal Music Group has reportedly announced that it will undergo a massive restructuring of the label system.

Universal Music Group Restructures Label System

On Thursday (Feb. 1), reports emerged from Chart Data on X, formerly known as Twitter, that UMG would restructure major labels such as Def Jam Recordings, Republic Records, Island Records and Mercury Records under their oversight. Republic CEO Monte Lipman would be overseeing those five aforementioned labels specifically.

Additionally, Interscope CEO John Janick will now reportedly oversee Interscope as well as Geffen, Motown, Capitol, Priority, Verve and Blue Note.

UMG Pulls Music From TikTok

UMG's monumental announcement comes after the group pulled the plug on its relationship with TikTok on Tuesday (Jan. 31). The company wiped the app of songs from their biggest artists including Drake, Nicki Minaj, Eminem and more. UMG penned an open letter on their website titled "An Open Letter to the Artist and Songwriter Community Why We Must Call Time Out on TikTok."

"Our core mission is simple: to help our artists and songwriters attain their greatest creative and commercial potential," the open letter reads. "To achieve these goals, our teams employ their expertise and passion to strike deals with partners all around the world, partners who take seriously their responsibilities to fairly compensate our artists and songwriters and treat the user experience with respect."

The letter goes on to read, "Ultimately TikTok is trying to build a music-based business, without paying fair value for the music....We will always fight for our artists and songwriters and stand up for the creative and commercial value of music."

A spokesperson for TikTok released the following statement to XXL in response.

"It is sad and disappointing that Universal Music Group has put their own greed above the interests of their artists and songwriters," the statement read. "Despite Universal's false narrative and rhetoric, the fact is they have chosen to walk away from the powerful support of a platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent. TikTok has been able to reach 'artist-first' agreements with every other label and publisher. Clearly, Universal's self-serving actions are not in the best interests of artists, songwriters and fans."

Read UMG's full letter here.