Universal Music Group has given its global market share a boost with a significant acquisition in Japan – the world’s second biggest recorded music territory.
Vivendi-owned UMG has swooped for Tokyo-based Office Augusta, in a deal which comes into effect on January 6, 2017.
The move represents Universal’s first major buyout since it snapped up US-based digital marketing agency Fame House in May.
Office Augusta is what’s known as a ‘full-stack’ music company, operating divisions across records, music publishing, live promotion and artist management.
Established in 1992 by Yoshinobu Morikawa, it represents some of Japan’s most popular recording artists and songwriters, including Kyoko, Masayoshi Yamazaki, Sukimaswitch (pictured), COIL, Yuko Araki, Yu Sakai and Motohiro Hata.
Under the terms of the agreement, Universal Music Japan (UMJ) will obtain exclusive rights for the entire Office Augusta master recording and publishing catalogues – a move the major says will ‘significantly enhance [our] artist roster’.
Outside of music rights, says Universal, the deal will also ‘accelerate the evolution of UMJ into Japan’s leading full-service music entertainment company, enhancing [our] capabilities in live music, merchandise and fan clubs’.
In addition, Office Augusta is expected to upstream selected management clients into UMG labels.
“Office Augusta’s ambition mirrors our own in creating lasting career development and new commercial opportunities for recording artists and songwriters.”
Sir Lucian Grainge, UMG
Naoshi Fujikura, President and CEO of Universal Music Japan, said: “We are truly honoured to welcome Office Augusta to UMJ. In partnership with Augusta and its highly talented artists, we look forward to delivering exciting new music and emotive experiences to music fans.
“I have always had the greatest respect for Mr. Morikawa and Augusta’s artists’ achievements as pioneers within the music industry, and strongly believe this partnership will bring greater prosperity to UMG and the music industry as a whole.”
Sir Lucian Grainge, Chairman and CEO of Universal Music Group said: “At UMG, we pride ourselves on our culture of artist development, so we are thrilled to join forces with Office Augusta, whose ambition mirrors our own in creating lasting career development and new commercial opportunities for recording artists and songwriters.
“Japan is one of the most important and dynamic music markets in the world, and with Naoshi’s leadership combined with our exciting new partnership with Mr. Morikawa, I’m confident that we will continue to evolve Universal Music Japan into the preeminent home for artists.”
As Grainge pointed out in a recent end-of-year memo to UMG staff, Universal Music Japan scored the two biggest-selling albums in the market of 2016: Utada Hikaru and RADWIMPS.
Under UMG, Office Augusta will presumably switch from the traditional Japanese model of short-term rights licensing to long-term copyright administration – allowing better continual exploitation of its catalogue.
That continual exploitation, of course, brings into view the prospect of streaming’s evolution in Japan.
According to RIAJ stats, Japan’s total audio recorded music market was worth 113.45bn Yen ($1.12bn) in the first six months of this year.
Of that figure, 25.66bn Yen ($254m), or 22.6%, was made up of digital revenues, of which subscription streaming generated just 9.34bn Yen ($92.5m).
That subscription figure was only worth 8.2% of total revenues – but jumped 85% year-on-year, a stat which looks likely to rise following the launch of Spotify in Japan in September.
According to the IFPI, Japan was the world’s second biggest recorded music market in 2015, behind the US. Japan generated $2.45bn for labels and artists in the year – while claiming almost a third of total worldwide physical music revenues.
Office Augusta manages recorded music and master rights for nearly 1,800 tracks, while handling artist management for a roster of 19 artists and a live music promotions business that includes the popular Augusta Camp music festival.
Its Augusta Publishing company represents the rights more than 1,200 songs, while its Seven Dials operation operates fan club and merch businesses.Music Business Worldwide