Universal Music Group’s recent batch of international deals highlight 5 global trends to watch in 2024

Image credit: Press
Ayra Starr, one of Mavin Records' most successful signings. UMG announced its acquisition of a majority stake in the Lagos-headquartered company
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Universal Music Group started off 2024 with a bang, announcing three new deals just in the first week of the year.

First, UMG announced an extension of its multi-year licensing agreement with Tencent Music Entertainment, the largest owner of music streaming services in China.

Then, we learned that the world’s largest music rightsholder is acquiring the recording catalog and some of the publishing rights of Oriental Star Agencies, a UK-headquartered label closely associated with South Asian music.

Finally, Virgin Music Group, UMG’s global indie artist and label services division, announced that it’s acquiring Los Angeles-headquartered Saban Music Latin.

Since then, UMG’s international (i.e. ex-US) deals have kept on coming, including a partnership with United Arab Emirates-based Dubai Global Music City (DGMC) to build what’s being billed as “the Middle East’s first-ever Music City”.

Most recently, UMG announced it’s buying a majority stake in Nigeria-headquartered Afrobeats label Mavin Global.

While that list, on the surface, covers activity that one might expect from a globally-focused music giant, these deals actually neatly encapsulate five trends in global music to watch out for in 2024…

1) The continued rise of Latin Music – and a race to acquire to Latin Music companies

UMG’s acquisition of Saban Music Latin highlights the massive explosion in popularity of Latin Music over the past decade or so, a trend that has created such global megastars as Bad Bunny, Peso Pluma and Karol G.

Spotify recently released a set of analytics throwing into sharp relief just how large this trend has been. The music streaming service reports that, in the decade since Spotify expanded into Latin American countries, the audience for Latin Music on its platform grew by 986% – though, of course, some of that growth can be accounted for by the rising popularity of Spotify itself.

All the same, digging deeper into the data, we can see that Latin Music is in fact growing, regardless of Spotify’s own pace of growth.

In 2013, the first year that Spotify had a presence in the LatAm market, there were no Latin Music tracks on its global top 100. By 2023, more than one in five of the tracks on the global top 100 were Latin.

And on top of worldwide appeal, Latin Music has come to absolutely dominate the charts in Latin American countries themselves, rising from 49% of the local top 100 tracks in Mexico in 2013, to 88% by 2023. In Argentina, the local top 100 went from 25% Latin music in 2013 to 94% by 2023.

Source: Spotify

Notably, a large part of that growth has been driven by indie labels and artists.

Bad Bunny, arguably the largest Latin Music star of the past few years, has eschewed major-label representation, and is signed to Puerto Rican indie label Rimas Entertainment (in which Sony now reportedly owns a minority stake). Peso Pluma runs his own label, Double P Records, under indie label Prajin Parlay Records.

That means the larger recording companies are playing catch-up, and they’re using the one tool that gives them an advantage: the capital for major acquisitions and partnerships.

UMG’s recent acquisition of Saban Music Latin is just the latest in a series of moves into the Latin Music scene in recent years. When UMG rebranded Capitol Music Group’s Caroline as Virgin Music Label & Artist Services in 2021, it expanded the business into Spain and Mexico, creating what it described as “the first fully integrated label services division worldwide for Latin music.”

A year earlier, it had signed a multi-faceted strategic partnership with global Latin Music superstar Daddy Yankee, and a year before that, Universal Music Publishing Group signed an exclusive publishing deal with then-19-year-old Puerto Rican/Cuban artist Mariah.

Not surprisingly, other global record companies want in on the Latin action as well, and one notable one of late is HYBE, the Korean music company that made BTS the world’s biggest K-pop stars.

Reports abounded through 2023 that HYBE was raising a stack of cash for Latin Music acquisitions, with one report indicating the company had put together USD $380 million to get into the Latin Music game. That move came to fruition last November, when HYBE acquired label Exile Music, and used that as the foundation for its newly-launched, Mexico-based HYBE Latin America.

Other recording majors are, not surprisingly, also jumping into the Latin Music game, finding niches for themselves such as Warner Music Group’s distribution arm ADA Worldwide, with its development of ADA Latin, and Sony Music Entertainment, with its acquisition of the catalog of Mexican regional label Remex Music and its buyout of Brazilian domestic label Som Livre. Sony was also reported to have been in talks to buy a stake in Rimas Entertainment of Bad Bunny fame.

And when we look at Latin Music sales, it’s no wonder. The numbers for 2023 aren’t in yet, but in 2022, Latin Music exceeded USD $1 billion in revenue in the US for the first time, a 23.8% YoY increase from 2021. Latin Music claimed an 8% share of all music streamed in the US, a number that has been rising steadily year after year.

That growth is why we can expect this trend to continue in 2024: Look out for more partnerships and acquisitions in the Latin Music space as the year goes on.

2) The increased importance of China’s music business, and the growing need for companies from the West to have a strategy for China

In its 2023 Global Music Report, international recording industry group IFPI reported that recorded music revenues in China jumped by 28.4% in 2022, generating USD $1.2 billion for recorded music rightsholders that year and propelling the market into the top five globally, ahead of France.

Though 2023 numbers aren’t in yet, we can see that this breakneck growth continued last year through the numbers reported by China’s largest music streaming services.

Tencent Music Entertainment, which operates the QQ Music, Kugou and Kuwo streaming services, reported 85.3 million paying subscribers in Q3 2023, up 19.8% YoY. Rival streamer NetEase Cloud Music reported 41.8 million paying subscribers at the end of H1 2023, up 11.0% YoY.

Though China recently lost its status as world’s most populous country to India, its consumers are, on average, considerably wealthier than those of its South Asian neighbor, making China a seriously lucrative market that the global recording companies want in on.

Little wonder, then, that the big three global recording companies continue their expansion into the Chinese market, for instance with Sony Music Entertainment’s launch of RCA Greater China in 2022, and Warner Music China’s “landmark” deal to distribute superstar Lay Zhang’s next album.

In the announcement of the extension of UMG’s licensing deal with Tencent Music Entertainment, UMG’s EVP of Market Development, Adam Granite, talked about the company’s renewed focus on signing and supporting the best talent from across Greater China.”

The company’s recent hires in China all point towards an expansion of UMG’s artist roster in the country.

Ming Lu Universal Music Greater China
Image courtesy of Universal Music Greater China

UMG China recently appointed Ming Lu (pictured) to a newly created role as Vice President of Artist Development and Entertainment Strategy. Prior to joining UMG China, Lu was a starmaker at Warner and Modern Sky, China’s largest indie record label.

His role at UMG China will be to “unlock creative and commercial opportunities for UMGC’s artist roster” by spearheading initiatives that will develop Chinese-language artists and build collaborations across film, TV, gaming, advertising and other entertainment sectors, UMGC said in December.

That came a few months after Timothy Xu was appointed CEO of Universal Music Greater China, following a stint as President and CEO at Taihe Music Group (TMG), which claims to have the world’s largest market share of Chinese music, and as Chairman and CEO, Greater China, at Sony Music.

UMG Chairman and CEO Sir Lucian Grainge called Xu “a real music exec, given his deep experience generating creative and commercial success in the region.”

These are all clear signals that we can expect more China-related announcements from UMG in the coming year, and not just on the licensing side.

3) An increased focus on localized content… for a global audience

We’ve reported before on the trend of “glocalization” in the music industry, the (somewhat paradoxical) phenomenon of music becoming more local, and more local artists becoming global stars.

As improved access to distribution channels makes it easier for local talent to reach audiences, the ubiquity of streaming services makes it increasingly easy for those successful local artists to reach global audiences.

The above-mentioned trend in Latin Music – which has gone global, while dominating Latin American markets – is a perfect example of this.

And UMG’s acquisition of the catalog of Oriental Star Agencies – a label specializing in the UK’s South Asian music scene – is a perfect example of how major recording companies are aiming to capitalize on the trend.

“Data is showing… that the market share of local artists is increasing on all digital music services,” Believe CEO Denis Ladegaillerie (pictured) said on an earnings call last summer.

It’s not just a trend on Spotify, Ladegaillerie said, but also “on YouTube and other services.”

In response, Believe is “continuing to invest in developing local artists in markets across a wide range of genres of music,” he added.

Believe’s own strategy in that regard has been to focus particularly on India, where it says it has reached second place in terms of market share in digital music services.

But Believe isn’t the only one. All the major recording companies are finding ways to jump into local markets, to capitalize not only on the growth of those local markets, but on the potential to bring those local artists to a global audience.

One of the clearest recent signs of this is UMG’s deal with Dubai Global Music City, which – according to DGMC – aims to develop the world’s first “purpose-built music city” with the goal of “build[ing] sustainable careers in the international music industry and export[ing] the region’s signature sound.”

In other words, the aim is to recreate the success of Latin Music and K-Pop with the musical talent of the Middle East and North Africa (MENA).

Prior to the Music City deal, UMG made notable inroads in the MENA market with the acquisition last summer of Chakaba Music, a UAE-headquartered firm specializing in digital distribution, marketing, publishing, and artist services across the MENA region.

That came a few years after UMG launched Universal Arabic Music, a brand UMG said would create new opportunities to “advance Arabic music and culture with global partners, platforms and brands.”

Of course, UMG isn’t focused solely on the Middle East.

Just weeks before the Chakaba Music acquisition, it acquired majority control of Thailand’s RS Group, a music distributor and artist management company that owns the second-largest music catalog in Thailand, comprising more than 10,000 master recordings, 6,000 copyright ownerships, plus publishing rights and licenses spanning some four decades.

Within its catalog are more than 960 artists, including pop duo Dan-Beam, pop singer James Ruangsak Loychusak and ballad diva Parn Thanaporn Wagprayoon, among others.

All of it seems (literally) miles away from UMG-signed global megastars like Taylor Swift and Olivia Rodrigo, but why wouldn’t UMG be doing this?

Company boss Sir Lucian Grainge has made it clear numerous times that the company is “incredibly selective” when it comes to these types of acquisitions, so presumably this isn’t random throwing of money around.

And we’ve seen K-pop and Latin Music evolve from local flavors to global cultural powerhouses, so it’s reasonable to think that other local genres can and will make the jump.

The question, of course, is which one’s next? And that brings us to another trend for 2024…

4) 2024 could be the year of South Asian/Bollywood-inspired music

The music industry’s growing focus on developing markets means they are getting better (maybe) at sniffing out global trends, and if recent acquisitions are anything to go by, 2024 could see an increase in the prominence of South Asian music on the global scene.

It’s clear the South Asian music market – though still quite small relative to the region’s massive population – is growing at eye-watering speed. A recent report from EY stated that music publishing revenue in India grew 2.5-fold in just three years.

And in its year-end report for 2023, market monitor Luminate noted that Hindi was the third most common language among the top 10,000 on-demand streaming tracks globally last year. The share of Hindi in the top 10,000 grew from 3.8% in 2021 to 7.8% in 2023, putting it behind only English (54.9%) and Spanish (10.1%).

What’s more, Luminate’s data suggested that India could soon be the world’s largest music streaming market, at least by volume, if not by revenue.

In 2023, India clocked 1.037 trillion song streams, behind only the US at 1.454 trillion plays. And, given that the number of streams in India grew by 463.7 billion streams in a single year, while the US saw an increase of “just” 184.0 billion, India could easily take the lead in streaming within the next year or two.

Clearly, South Asian music is evolving from largely being soundtracks to Bollywood movies, to being a cultural and commercial force of its own.

Another sign that portends a larger role for Indian and Pakistani music is the growing number of deals involving global music companies entering the South Asian music market.

Sony Music/YouTube

Besides its acquisition of Oriental Star Agencies’ catalog, UMG has, in the past few years, made major inroads in South Asia.

In 2022, it launched Def Jam India, bringing its hip-hop brand to the South Asian market, and bought a majority stake in TM Ventures, a music and entertainment company that manages a roster of artists that includes rapper Badshah (pictured), who himself signed a multi-year deal with UMG a year earlier.

Most recently, this past fall, UMG launched a joint venture with Ty Ty Smith, co-founder of Roc Nation, and South London artist, producer, and music exec Shabz Naqvi to form Desi Trill Music, a label dedicated to Desi Trill, the genre that combines South Asian music with hip-hop.

UMG also entered into a partnership last fall with REPRESENT, a Mumbai-headquartered talent management agency.

Around about the same time, Warner Music Group acquired India-based artist management and live events company E-Positive. It’s one of a number of deals WMG has struck in India since it launched Warner Music India in 2020.

Meanwhile, Sony Music Entertainment, which has called itself “India’s leading record company,” launched a joint venture in 2022 with Sony Pictures Entertainment to create a company focused on “ventures for media talent in India.” This past summer, Sony Music Publishing signed a deal with Indian record label Big Bang Music.

There’s also more attention being paid to South Asian music in other, smaller corners of the music business. For instance, sample library and music creation platform Splice announced last November that it’s launching a new label, Aaroh, that focuses on South Asian music and sounds.

Thus far, Aaroh includes five separate sample packs of sounds that offer a “sonic exploration” of South Asian musical styles, comprising “Vintage Bollywood,” “Sitar,” “Tabla,” “Konnakol” and “Winds of India.”

Clearly, Splice anticipates an increase in interest in South Asian music, as do the big three record companies.

One thing holding back the industry in India is a rather messy system of copyright law, which appears to be at least part of the reason for wide copyright non-compliance in the country.

Yet it’s hard to imagine that issue doing much to hold back South Asian music as a cultural force. Whether it’s this year or next decade, expect to hear a lot more from the South Asian music scene in the years to come. The same can be said for music from another region as well.

5) Afrobeats is becoming an even bigger force in global music

Last year market a notable milestone for Afrobeats: Nigerian superstar Rema‘s Calm Down Remix, featuring Selena Gomez, became the first African artist-led track to surpass a billion streams on Spotify. At that time, Afrobeats music had amassed more than 15 billion streams on Spotify.

Afrobeats, the umbrella terms for West African pop music, has seen accelerating growth in popularity for the past two decades, and like virtually every international music trend these days, it’s been helped along by the rise of streaming, and the more democratic access to music distribution that streaming has enabled.

Afrobeats’ rise to prominence was something of a slow burn. It’s been more than 10 years since Oliver Twist by D’Banj became the first Nigerian song to crack the UK Top 10.

Yet more recently, the slow burn has turned into a wildfire. According to IFPI, sub-Saharan Africa was the fastest-growing recorded music market in 2022, growing by 34.7% that year, compared to 25.9% for Latin America, the second-fastest-growing region.

Rema was originally discovered on Instagram, and developed into a star with the help of Lagos-headquartered Mavin Records and its founder, Don Jazzy.

Jazzy (pictured inset) has also been responsible for signing some of Afrobeats’ biggest acts, including Ayra Starr and also Tiwa Savage, who left Mavin to sign an exclusive global recording deal with UMG in 2019.

So perhaps it’s not entirely a surprise that last Monday (February 26), UMG announced it had acquired a majority stake in Mavin.

UMG says Mavin will “maintain autonomy” over its strategy and future talent development, and Don Jazzy, along with COO Tega Oghenejobo, will continue leading the company.

The Mavin investment is hardly UMG’s first foray into the sub-Saharan music scene.

In 2020, the company launched Def Jam Africa. based in Lagos and Johannesburg, the label’s aim was to identify and sign hip-hop, Afrobeats and trap talent from across the entire continent. (And it came less than a year after UMG expanded the Def Jam brand into Southeast Asia.) Def Jam Africa would soon expand into Cote D’Ivoire, Cameroon and Senegal.

In 2023, UMG’s artist and label services company Virgin Music Group expanded its operations into Lagos, appointing Olukorede “Kay” Ikazoboh to the lead role at Virgin Music Group Nigeria.

The other music industry majors have also been busy on the continent, with Warner Music Group acquiring a majority stake in distributor Africori in 2022, and forming a partnership last year with Small World Records, a label and publisher founded by Ghanaian artist and entrepreneur SmallGod.

Meanwhile, Sony Music’s The Orchard has been busy in Africa, establishing itself in a number of the largest music markets on the continent. Sony Music Publishing has been expanding on the continent in recent years, including, in 2022, with the opening of a Nigerian office.

And even as the recording majors’ activity on the continent reflects a growing respect for the value of African pop music, the people on the ground within Africa’s music business report shifting attitudes within, as well.

“Young Africans are also finding their voices and starting to turn their backs on the idea that the West is the purveyor of all things cool,” Lanre Masha, Director, West Africa, at The Orchard told MBW in an interview a few months back.

“I see more and more kids wanting to be ‘African Giants’ that are ‘Made in Lagos.’ To be African across the world is actually a social currency right now.”

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