Universal Music Group

Early history

Universal Music was once the music attached to film studio Universal Pictures. Its origins go back to the formation of the American branch of Decca Records in September 1934. The Decca Record Co. Ltd. of England spun American Decca off in 1939. MCA Inc. merged with American Decca in 1962. The present organization was formed when its parent company Seagram purchased PolyGram in May 1998 and merged it with Universal Music Group in early 1999. However, the name had first appeared in 1996 when MCA Music Entertainment Group was renamed Universal Music Group. The PolyGram acquisition included Deutsche Grammophon which traces its ancestry to Berliner Gramophone making Deutsche Grammophon UMG's oldest unit. UMG's Canadian unit traces its ancestry to a Berliner Gramophone breakaway firm the Compo Company.

Acquisition by Vivendi

With the 2004 acquisition of Universal Studios by General Electric and merging with GE's NBC, Universal Music Group was cast under separate management from the eponymous film studio. This is the second time a music company has done so, the first being the separation of Time Warner and Warner Music Group. In February 2006, the label became 100% owned by French media conglomerate Vivendi when Vivendi purchased the last 20% from Matsushita (renamed as Panasonic Corporation in 2008), the group's sole owner from 1990 to 1995 and co-owner from 1995 to 2006. On June 25, 2007, Vivendi completed its €1.63 billion ($2.4 billion) purchase of BMG Music Publishing, after receiving European Union regulatory approval, having announced the acquisition on September 6, 2006.

2010s and EMI purchase

Doug Morris stepped down from his position as CEO on January 1, 2011. Former chairman/CEO of Universal Music International Lucian Grainge was promoted to CEO of the company. Grainge later replaced him as chairman on March 9, 2011. Morris became the next chairman of Sony Music Entertainment on July 1, 2011. With Grainge's appointment as CEO at UMG, Max Hole was promoted to COO of UMGI, effective July 1, 2010. Starting in 2011 UMG's Interscope Geffen A&M Records will be signing contestants from American Idol/Idol series. On January 2011, UMG announced it was donating 200,000 master recordings from the 1920s to 1940s to the Library of Congress for preservation.

In March 2011, Barry Weiss became chairman & CEO of The Island Def Jam Music Group & Universal Republic Records. Both companies are restructuring under Weiss. In December 2011, David Foster was named Chairman of Verve Music Group.

On November 12, 2011, it was announced EMI would sell its recorded music operations to Universal Music Group for £1.2 billion ($1.9 billion) and its music publishing operations to a Sony-led consortium for $2.2 billion. Among the other companies that had competed for the recorded music business was Warner Music Group which was reported to have made a $2 billion bid. However, IMPALA has said it would fight the merger. In March 2012, the European Union opened an investigation into Universal's purchase of EMI's recorded music division and has asked rivals and consumer groups whether the deal will result in higher prices and shut out competitors. Coincidentally, UMG sister company StudioCanal has owned the EMI Films library for several years.

On September 21, 2012, the sale of EMI to UMG was approved in Europe and the United States by the European Commission and Federal Trade Commission respectively. However, the European Commission approved the deal only under the condition the merged company divest one third of its total operations to other companies with "a proven track record in the music industry". UMG divested Mute Records, Parlophone, Roxy Recordings, MPS Records, Cooperative Music, Now That's What I Call Music!, Jazzland, Universal Greece, Sanctuary Records, Chrysalis Records, EMI Classics, Virgin Classics and EMI's European regional labels to comply with this condition. The Beatles' recorded music library was allowed to remain with UMG despite being considered part of Parlophone and is now managed by UMG's reorganized Capitol Music Group worldwide. Robbie Williams, who had recorded for Chrysalis, had his catalogue transferred to Universal's Island Records.

2012–present: EMI integration and divisions reorganization

Universal Music Group completed their acquisition of EMI on September 28, 2012. In November 2012, Steve Barnett was appointed chairman & CEO of Capitol Music Group. He formerly served as COO of Columbia Records. In compliance the conditions of the European Commission after purchase of EMI, Universal Music Group sold a German-based music rights company BMG the Mute catalogue on December 22, 2012. Two months later, BMG acquired Sanctuary Records for close to 50 million euros.

On November 8, 2012, Universal Music and Hewlett-Packard launched a marketing operation: with a HP connected Music computer, the customer can access music from Universal artists, as well as exclusive content.

On February 8, 2013, UMG sold to Warner Music Group the Parlophone Music Group consisting of Parlophone Records, Chrysalis Records, EMI Classics, Virgin Classics and EMI Records' Belgian, Czech, Danish, French, Norwegian, Portuguese, Spanish, Slovak and Swedish divisions, to a value of $765 million (£487 million). Play It Again Sam acquired Co-Operative Music for £500,000 in March 2013. The previous month, Sony Music Entertainment acquired Universal's European share in Now That's What I Call Music for approximately $60 million. With EMI's absorption into Universal Music complete, its British operations will consist of five label units: Island, Polydor, Decca, Virgin EMI and Capitol. Edel AG acquired the MPS catalogue from Universal in January 2014.

On March 20, 2013, UMG announced the worldwide extension of their exclusive distribution deal with the Disney Music Group, excluding Japan and Russia. As a result of this deal DMG's labels and artists have access to UMG's roster of multiplatinum and Grammy Award-winning producers and songwriters on a worldwide basis. The exclusive deal also saw UMG granted unlimited access to all rights pertaining to Disney's 85-year back catalog of soundtracks and albums.

On April 2, 2013, the gospel music divisions of Motown Records and EMI merged to form a new label called Motown Gospel. In May 2013, Japanese company SoftBank offered 8.5 billion US dollars to Vivendi for the acquisition of UMG, but Vivendi rejected it. As of November 14, 2013, Universal Music will now distribute Warner Music Group's releases in the Middle East as a result of the integration of EMI's branch in the said region.

On April 1, 2014, Universal Music announced the disbandment of Island Def Jam Music, one of four operational umbrella groups within Universal Music. Universal CEO Lucian Grainge said of the closure, "No matter how much we might work to build 'IDJ' as a brand, that brand could never be as powerful as each of IDJ's constituent parts." Effective on the day of the announcement, Island Records and Def Jam will now operate as autonomous record labels. David Massey and Bartels, who worked respectively at Island and Def Jam Records, will lead the new record labels independently. Barry Weiss who previously moved from Sony Music to head up Island Def Jam Music back in 2012 when Motown Records was incorporated into Island Def Jam has stepped down from Universal Music. Additionally, as part of the changes to the labels, Motown Records will be transferred to Los Angeles to become part of the Capitol Music Group—previous Vice President Ethiopia Habtemariam was promoted to Label President for Motown Records. Republic Records now operates independently while the Interscope Geffen A&M group remains unchanged.

Multimedia content delivery

Universal Music Group co-developed Vevo, a site designed for music videos inspired by Hulu.com, which similarly, will allow for free, ad-supported streaming of music videos and other music content.

Santa Monica

The UMG main global headquarters are located at 2220 Colorado Avenue in Santa Monica. The Santa Monica headquarters oversees its legal obligations in the US and Canada such as Human Resources, and any legal issues surrounding the company. Interscope-Geffen-A&M and Verve Music Group are based at their LA headquarters with John Janick heading Interscope-Geffen-A&M and David Foster heading Verve. Def Jam, Island and Republic Records has some offices at the Santa Monica headquarters. The building is also home to Universal Music Enterprises (UME). UMG chairman & CEO Lucian Grainge works out of the company's Santa Monica headquarters. Universal Music Publishing is headquartered at 2100 Colorado Avenue, which is down the block from UMG's offices.

Hollywood

The Capitol Music Group is headquartered at the Capitol Records Building in Hollywood. Tom Cage was assigned to the record label in 2004 after a short outing with A&M Records.

Universal City

Universal Music Group Distribution is headquartered in Universal City, CA.

New York City

UMG has a major workforce in New York City. UMG's New York City headquarters deals mainly with Universal's marketing, Information Systems, and finance. It is also where several of UMG's labels are headquartered. Island Records, Def Jam Recordings, Republic Records, Decca Label Group and the newly re-launched Geffen Records are all headquartered in New York City.

London

Universal Music Group Global (formerly known as Universal Music Group International (UMGI)) is headquartered in High Street Kensington, London. Global manages UMG's offices in most countries outside of North America.

Berlin

Universal Music GmbH, the German subsidiary, is headquartered in Berlin. It has moved in 2002 from Hamburg to the district Friedrichshain at the river Spree.

Warsaw

Universal Music Group. Universal Music Polska

Other locations

Universal Music Latin Entertainment is headquartered in Woodland Hills, California while Universal Music Group Nashville is headquartered in Nashville, Tennessee. Universal Music Group's parent company, Vivendi, is headquartered in Paris, France.

CD price fixing

Between 1995 and 2000, music companies were found to have used illegal marketing agreements such as minimum advertised pricing to artificially inflate prices of compact discs in order to end price wars by discounters such as Best Buy and Target in the early 1990s. A settlement in 2002 included the music publishers and distributors; Sony Music, Warner Music, Bertelsmann Music Group, EMI Music and Universal Music Group. In restitution for price fixing they agreed to pay a $67.4 million fine and distribute $75.7 million in CDs to public and non-profit groups but admitted no wrongdoing. It is estimated suppliers/customers were overcharged by nearly $500 million and up to $5 per album which conflicts with proof of sale and purchase interests.

Payola

In May 2006, an investigation led by then New York Attorney General, Eliot Spitzer, concluded with a determination that Universal Music Group bribed radio stations to play songs from Ashlee Simpson, Brian McKnight, Big Tymers, Nick Lachey, Lindsay Lohan and other performers under Universal labels. The company paid $12 million to the state in settlement.

YouTube

In May 2007, UMG was accused of abusing the Digital Millennium Copyright Act in order to quell criticism, by forcing YouTube to remove several videos which contained UMG's music. Eventually, UMG retracted its claims after being challenged by the Electronic Frontier Foundation. In the same year, UMG was accused of using the Digital Millennium Copyright Act to indiscriminately remove content related to the artist Prince, most notably a twenty-nine-second home video in which a child danced to one of Prince's songs. In April 2016, UMG had the audio muted of a video clip showing Katherine Jenkins singing the British national anthem. They claimed that "God Save the Queen" was a copyrighted song, and YouTube initially complied with this request, but later allowed the video to be viewed with the original audio track.

Myspace

In December 2007, UMG announced a deal with Imeem which allows users of the social network to listen to any track from Universal's catalogue for free with a portion of the advertising generated by the music being shared with the record label. Two weeks after the deal was announced Michael Robertson speculated on the secret terms of the deal and argued that ultimately this was a bad deal for imeem. This speculation lead to a flame war on the Pho digital media email list as imeem representatives denied his claims and dismissed his theories as unfounded. All traffic was redirected to MySpace after the company acquired Imeem on December 8, 2009.

Megaupload

On December 9, 2011, Megaupload published a music video titled: "The Mega Song", showing artists including Kanye West, Snoop Dogg, Alicia Keys and will.i.am endorsing the company. The music video was also uploaded to YouTube, but was removed following a takedown request by UMG. Megaupload said that the video contained no infringing content, commenting: "we have signed agreements with every featured artist for this campaign". Megaupload requested an apology from UMG, and filed a lawsuit against the company in the United States District Court for the Northern District of California, on December 12, 2011. UMG denied that the takedown was ordered under the terms of the Digital Millennium Copyright Act, and said that the takedown was "pursuant to the UMG-YouTube agreement," which gives UMG "the right to block or remove user-posted videos through YouTube's CMS (Content Management System) based on a number of contractually specified criteria." The video was subsequently returned to YouTube, with the reasons for the UMG takedown remaining unclear. Lawyers for will.i.am initially claimed that he had never agreed to the project, and on December 12, he denied any involvement in the takedown notice.