MBW Reacts is a series of analytical commentaries from Music Business Worldwide written in response to major recent entertainment events or news stories. Only MBW+ subscribers have unlimited access to these articles. The below article originally appeared within Tim Ingham’s latest MBW+ Review email, issued exclusively to MBW+ subscribers.
So the elevator opens, and I find myself face-to-face with Diana Ross.
True story. During the Grammys earlier this month, mid-show, I took a lift – as we say in the UK – down from the top floor of the Crypto Arena to the ground. And as the metal doors part, there, in all her chiffon finery, stands the Queen Of Motown.
I just about managed to stutter, “Erm… hello, Ms. Ross.”
Had I found the words, I wish I’d have beamed: “Ms. Ross – an honor! Can I say: (1) It’s a disgrace these fools never gave you a Grammy – other than a paltry Lifetime Achievement sop – especially during your imperial era, and (2) You being here, handing out an award bold as brass, when this ceremony snubbed you so many times, is punk rock AF. Thank you on behalf of Queen, Bob Marley, ABBA, Tupac, Oasis, Snoop, Guns’N’Roses… and all the other cultural torchbearers this supposedly distinguished show has resolutely failed to recognize.”
Oh well. “Erm… hello, Ms. Ross,” will have to do.
This interaction is of a theme.
The Grammys, like the US record industry it represents, is sometimes so immersed in its own received wisdom that it forgets to notice seismic movements happening right under its nose.
Sitting in Los Angeles, watching Kendrick Lamar and Beyoncé collect golden gongs, the Grammys feels like the sole epicenter of the global industry.
This is an America-first illusion.
Example: As the 2025 edition of ‘Music’s Biggest Night’ played out, over in Tokyo, Universal Music Group was busy negotiating the majority purchase of Japanese label and management company A-Sketch.
According to filings I’ve seen, UMG eventually agreed to acquire a 66% holding in A-Sketch – home to J-pop stars Saucy Dog, Flumpool, and more – for an initial amount of 2.77 billion Yen, equivalent to around USD $18.2 million.
The seller was Japan’s Amuse Inc; the other 34% of A-Sketch is owned by KDDI Corporation.
The A-Sketch deal followed UMG’s 100% acqui
UMG has also been heavily investing in other Asian territories – including Indonesia, Vietnam, and Greater China (where, in the last few weeks, it signed a catalog-spanning deal with local legend, Liu Huan).
Looking at the numbers, UMG’s aggressive expansion in Asia is no surprise.
According to its latest Annual Report, Universal generated USD $4.7 billion in yearly recorded music (RM) revenues in North America in 2023 – representing some 51% of its global RM revenues.
Juxtaposed with IFPI industry data, this implies that UMG achieved a dominant market share of 40.1% in North America in 2023.
Over in Asia, though, things look rather different.
In APAC, UMG faces strong challenges from Sony (especially in Japan), Believe, and Warner, plus – most importantly – powerful local rivals across territories like China, India, and South Korea.
According to my calculations, Universal generated approximately USD $1.2 billion in RM revenues in Asia in 2023 – implying an annual market share in the region (vs. IFPI’s figures) of 18.6%.
With deals like A-Sketch and RS Group – plus a flurry of recent partnerships in China – we are witnessing UMG’s determination to push that number into the twenty-percents.
Meanwhile, a separate macro picture is further pushing Universal (and its rivals) to bet big in Asia.
Because Asia, mainly driven by the rapid growth of China, is starting to gnaw into North America’s global music market share.
Here’s a stat that hasn’t received nearly enough attention in this business to date. I’ll make it red to remedy this!
Asia grew faster than North America as a recorded music market in 2023 according to IFPI data. Not just in terms of percentage growth (Asia was up 14.9% YoY; North America up 7.4% YoY), but in terms of real monetary increase in trade revenues.
I won’t give away the exact figures (you’ll need to purchase the full version of IFPI’s Global Music Report for those), but here’s a ballpark version: The annual trade revenue of Asia’s recorded music business grew by around USD $40 million more than North America’s in 2023.
Indeed, when Europe and Asia are combined, they represent more than 50% of global recorded music revenues today… substantially bigger than North America’s 41%.
It might have been refreshing to hear such an international reality recognized from the stage on ‘Music’s Biggest Night’.
To be clear, Universal’s relatively small current market share in Asia vs. its dominance in North America is a fairly natural situation within a record industry that has seen the US – off the back of streaming’s explosion – outstrip every other international territory for the past decade.
But now, the game has changed – and UMG is responding.
The stats mentioned here underline how crucial UMG’s expansion in Asia will be for its ambition to rule music rights in an increasingly globalized industry in the decade ahead.
(Relevant sidenote: I had several conversations in Grammy Week with people who volunteered to guess who might ultimately succeed Sir Lucian Grainge as UMG boss. For starters, I can’t see Grainge going anywhere soon, especially if he’s able to keep at least two of UMG’s key shareholders – Tencent, Vincent Bolloré, and Bill Ackman – happy. Indeed, with ‘Streaming 2.0’ in his sails and the handcuffs taken off UMG’s ability to acquire in the EU, I imagine Grainge is relishing the opportunity ahead of him. But it’s still interesting to me that, amongst the post-Grainge-era prognosticators I’ve spoken to, John Janick and Monte Lipman are the most repeated hypothetical candidates for the top job. This makes sense: as heads of UMG’s ‘West Coast’ and ‘East Coast’ Stateside label groups, they are each running major profit centers for the company. Yet, again, such an observation risks carrying the bouquet of US-centricity: I humbly remind the jury that Adam Granite, EVP, is leading UMG’s expansion efforts in Asia and other ‘high-potential markets’, and is often doing so in tandem with JT Myers and Nat Pastor. Myers and Pastor are co-CEOs of internationally-focused artist/label services division Virgin Music Group, arguably Universal’s No.1 strategic global priority today. As the worldwide music business continues to internationalize, the remit of all those named here – US-focused and less-US-focused – will only grow in influence.)
Universal’s acquisition of A-Sketch wasn’t the only big Asia-related news of the past week.
B2B distributor FUGA announced a series of key new partnerships in APAC, including deals with labels in Indonesia, India, and the Philippines.
Which, of course, brings us to another matter.
In this MAGA-era of lessened regulation, it seems highly likely to me that UMG (via VMG) will have no issue clearing its USD $775 million acquisition of FUGA’s owner, Downtown.
For evidence, look at the UK, where Sony memorably faced a turbulent ride from competition watchdog the CMA when buying AWAL in 2021.
British Prime Minister Keir Starmer, surely emboldened by Donald Trump’s mandate – and in search of quick investment into the UK – is currently defanging the once-prickly CMA. Starmer’s government just overtly (and bluntly) instructed the CMA to create a “more competitive business environment with less burdensome regulation”.
One irony here: I suspect UMG agreed to acquire CD Baby as part of its Downtown buy (pre-Trump) in the knowledge that it could divest it from the deal if pushed to offload something by regulators.
Those regulators (post-Trump) may now look the other way, leaving UMG to figure out how the DIY distributor best fits within its stack of offerings.
To a Western music business that has grown comfortable limiting its peripheral vision to the confines of North America and Europe, Universal’s current market share in these two territories would be an understandable cause for concern in the face of large-scale acquisitive moves.
Yet when you broaden your view to territories outside this duo – most notably the world’s fastest-growing music market, Asia – a more rounded picture emerges.
Universal Music Group’s global market share today is far from monopolistic.
UMG faces tough and sizable competition in regions outside North America and Europe, both from dominant local players (see: T-Series in India, for one), plus global competitors equally ravenous for growth.
(On that topic… here’s something we forgot to report this week: Sony Corp just confirmed on an earnings call that its Rob Stringer-led music division recently acquired a major catalog in India from Eros. Eros itself confirmed in its 2023 annual report that it had sold its entire music assets portfolio to a “global music major entity”. We’re always watching !)
Beyond global music trends, here’s another simple argument that Universal could present to regulators RE: concerns about its Downtown buy.
Compared to Big Tech – including music-involved Big Tech – even the music industry’s biggest beasts look like ‘indie’ minnows.
Google/Alphabet confirmed earlier this month that, in FY 2024, it generated $350 BILLION in annual revenues. Meta generated $164.5 BILLION; Apple generated $391 BILLION; Amazon generated $638 BILLION.
Cumulatively, these four companies (all of which negotiate with UMG over licenses) generated over $1.5 TRILLION (!) last year. That means they jointly generate more in a week than the entire global recorded music business manages in a year.
Such comparisons leave accusations of monopolistic power-wielding by UMG looking like intra-industry navel-gazing.
UMG’s ‘wins’ in its new deals with Amazon and Spotify – ‘wins’ that will now be replicated across this industry – demonstrate the upsides of the music rights business leaning on the fighting power of its very own ‘900lb gorilla’.
If said large simian is to really flex its muscles in future, Asia is the territory to watch.Music Business Worldwide
