Analysis of a major record company Universal Music Group Analysis of a major record company

background Universal Music Group (UMG) is the global music leader with a strong market position in recorded music, music publishing, and merchandising. Universal Music was once the music company attached to film studio Universal Pictures. Its origins go back to the formation of the American branch of Decca Records in 1934 and is a subsidiary of the French media conglomerate Vivendi. UMG also owns Universal Music Publishing Group, which is the second largest music publishing company in the world. Universal Music Group's global corporate headquarters are located in Santa Monica, California.  It is considered one of the "Big Three" record labels, along with Sony Music and Warner Music Group.

Record labels and artist UMG’s strength and legacy of music flows from a diverse family of record labels which include: A&M/Octone, Angel, Astralwerks, Blue Note Records, Capitol Christian Music Group, Capitol Records, Capitol Records Nashville, Caroline, Decca, Def Jam Recordings, Deutsche Grammophon, Disa, Emarcy, EMI Records, EMI Records Nashville, Fonovisa, Geffen Records, Harvest, Interscope Records, Island Records, Machete Music, Manhattan, MCA Nashville, Mercury Nashville, Mercury Records, Motown Records, Polydor Records, Republic Records, Show Dog–Universal Music, Universal Music Latino, Verve Music Group, and Virgin Records. UMG has multiple VIP artists, including the following in North America: Justin Bieber, The Black Eyed Peas, Mary J. Blige, Bon Jovi, Mariah Carey, Lana Del Rey. And the following in Europe: Afrojack, Avicii, Bastille, Cheryl Cole, Mumford & Sons, Swedish House Mafia.

Marketing practices 1995-2000 Between 1995 and 2000, music companies were found to have artificially inflated compact disc prices through the use of illegal marketing practices such as minimum advertised pricing, doing so in order to end price wars that began in the early 1990s by discounters such as Best Buy and Target. 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. This is a marketing practice that while illegal, could only be done by large record labels as smaller independent record labels have less influence over the market and their economic position would further lower their ability to inflate prices.

Marketing practices 2016-2017 UMG launched a campaign in late 2016 with French cosmetics brand Make Up For Ever under the #IAMANARTIST banner that combines elements such as music, brand and influencer marketing. The campaign saw Grammy-nominated British singer Jessie J collaborating with fashion photographer Rankin and acclaimed international makeup artist Sammy Mourabit to release a single called ‘Can’t Take My Eyes Off You’. The music video gained more than two million views on YouTube and streams on Spotify, and over 38,000 posts with the #IAMANARTIST hashtag on Instagram. The cosmetics brand then launched a lipstick product called ‘Artist Acrylip’ with Jessie J, it then sponsored the 2017 Grammy Awards after-parties the month after, where it invited 10 influential makeup influencers to meet and attend events with the singer. The lead up to the Grammy after-parties saw the brand pairing Jessie J up with two beauty bloggers, Nikkie Tutorials and Patrick Starrr to create unique original video collaborations. The videos together generated more than eight million views. The subsequent months saw Make Up For Ever continue to release new products with Jessie J, as well as make up tutorials.

Marketing practices 2016-2017 Speaking to The Drum in an exclusive interview, Universal Music Group’s global head of new business Olivier Robert-Murphy said “This campaign helped raise brand awareness, generate significant media exposure and align the Make Up For Ever talent and influencer marketing strategies together, whilst introducing new fans and consumers to the brand". The cross-referencing used by UMG is extremely meticulous and effective as it used multiple platforms, incorporating audience 2.0. This technique could not be used by small independent record labels as the contacts and economic backing would not be sufficient to fund a synergy of this scale, however local and contained versions on a far smaller scale would be possible though less effective.

Marketing analysis Universal Music Group has several advantages over smaller independent record labels due to the fact they have been running averagely for far longer than indie companies, giving them contacts, distribution deals, market experience and particularly huge financial backing. This gives larger record companies, particularly members of the big three, the ability to use extreme marketing techniques, like artificially inflate compact disc prices to reinforce their favoured prices, or market clients on multiple platforms to target specific features of an artists audience, like in 2016-17 where they marketed a female pop artist with makeup products and beauty bloggers. This is advanced marketing and are techniques not evadible to independent record companies.