Universal Music Group CEO Lucian Grange applauded the recent announcements by Spotify and YouTube Music for subscription price hikes during UMG’s Q2 earnings call. The $1 per month raises will, of course, augment streaming audio revenues for UMG’s artist line-up.
While stating the rising average revenue per user is encouraging, Grainge emphasized that it was only part of the equation. “First we must ensure that real artists with real fan bases are fairly compensated,” he said during a discussion about ongoing negotiations between major music labels and streaming platforms.
The UMG CEO sees a growing alignment between the labels and music platforms, a shift that he believes will lead to better compensation for artists and reward the engagement they foster. Despite the positive strides, Grainge acknowledges there’s more work to be done, expressing satisfaction with the progress being made alongside their platform partners.
UMG reported a 10.6% year-on-year increase in recorded music subscription revenue in the latest financial quarter, attributed partly to subscription price hikes. Spotify currently funnels 70% of subscription and advertising fees to rights holders.
However, Grainge maintained that the existing streaming model must continue evolving to adequately compensate music artists. He believes artists are currently “undervalued” and emphasized the importance of deepening their engagement with fan bases.
