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· Posted on
August 16, 2024

Universal Music Group signs a new music licencing deal with a social media giant.. because you belong with Me(ta)

UMG just announced that it’s expanding its multi-year music-licencing deal with Meta.

What's the key learning?

  • Social Media has become an important tool in boosting an artist's presence and fanbase - think: Olivia Rodrigo, Doja Cat, and now, CharlieXCX whose careers popped off after their music went viral on social media - especially TikTok.
  • After Universal's breakup with TikTok, Universal’s shares dropped 23% after it missed the mark with its Q2 results last month.
  • So it looks like Universal’s trying to find a middle ground with its new Meta deal.

👉 Background: Universal Music Group (UMG) is one of the biggest record labels worldwide and is the label behind major artists like Taylor Swift, Billie Eilish, The Weeknd, SZA, and Kendrick.

👉 What happened: UMG just announced that it’s expanding its multi-year music-licencing deal with Meta, which means Universal’s songs will be made available across Meta’s platforms.

👉 What else: This deal is off the back of a fallout between Universal and TikTok earlier this year after the two companies were unable to agree on a royalty rate. But Universal reckons that its new deal with Meta expands financial opportunities for the company and protect the royalties of its artists.

What's the key learning?

💡Music labels are currently walking a tightrope between short-term success and long-term financial growth.

💡Music labels need social media for their artist’s music to be discovered. In fact, 50% of people aged 18-24 use social media to discover new music and this helps artists catapult their career in ways they didn’t know was possible.

💡On the other hand, these artists also need to be compensated for their work which was apparently a challenge on TikTok.

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