Max Hole, COO of Universal Music Group International, spoke today about some of the company’s plans for its recently acquired EMI recorded-music properties — including decentralizing its profit & loss centers.
Speaking at a media conference for the industry’s Investing in Music report at the London headquarters for international trade body IFPI, Hole said one of EMI’s problems had been its move to centralize the business of its different label groups, including Virgin Music Group and Capitol Records.
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“We [at UMG] operate a multi-label structure, something that had declined at EMI. We have four to five competing labels with separate P&L centers that compete internally. That had disappeared at EMI. They have different labels but the P&L was centralized. We shall reverse that. Virgin will be Virgin again; Capitol will be Capitol again.”
He also added that the industry plans to focus a lot more of its attention on the emerging markets, especially in Asia and Latin America. This will be possible thanks to the growing global penetration of smartphones and computer tablets.
“For the first time, we can communicate with millions of consumers in different parts of the world,” he said. “The focus in the last 40 years has been on the major 10 markets, including the U.S., the U.K., and Germany. Although the revenues from Vietnam, Cambodia, even Africa, are small, the focus in the next 30 years will shift to the emerging markets. We are optimistic because our reach will be broader thanks to the explosion of digital media.”
That same digital-media trend will see more foreign-language acts gain international exposure, he said. The international growth of South Korea’s K-pop has already led to Korean girl band Girls’ Generation making English-language recordings with (UMG’s) Interscope in the U.S.
Although English-language artists will dominate the global music sector for a long while, Hole said he did not think the success of PSY, whose “Gangnam Style” has entered the Billboard charts and is the most viewed music video on YouTube, is a one-off. “It won’t be long before you see Chinese and Japanese acts also doing well internationally,” he added be saying labels’ investments in these artists are essential if the industry is to continue to grow.
Hole also added that the major labels would prefer to license their music to technology businesses as opposed to investing directly in digital media platforms. “We are not in the technology business; we would leave that to other people. Our investment in Vevo (the online music-video channel) was more a question of us and Sony feeling that MTV built an entire business on our creativity and we missed a trick. In the streaming-video age, we don’t want the same thing to happen again.”