Universal Music to boost its investment in Africa

French multinational Vivendi, which owns global music giant Universal Music Group, has announced a five-year plan to expand the reach of Universal Music Group by investing in digital channels, new countries and adding partnerships.

Nigerian duo P-Square with former Universal Music SA director Lindelani Mkhize in 2012. Photo: naijahits.wordpress.com
Nigerian duo P-Square with former Universal Music SA director Lindelani Mkhize in 2012. Photo: naijahits.wordpress.com

In the next five years, Universal Music will invest in Africa, India and China, which according to a recent announcement are considered “high-potential markets for music”, and concentrate their efforts to “accelerate the monetization of music on digital channels.”

Universal Music has already been in the news recently for signing artists from Namibia and Nigeria.

Universal Music’s CEO Lucian Grainge has meanwhile agreed to stay on at the record label until at least 2020, the French media group announced in a statement recently.

Chairman Vincent Bollore is working to transform Vivendi, selling off the company’s telecommunications assets and making acquisitions in media and entertainment. Vivendi announced last week that it had sold its remaining shares in Brazilian phone company Telefonica, exiting Brazil and further reducing its exposure to phone-company assets. The company has already disposed of assets in France and North Africa, as well as its holding in video-game maker Activision Blizzard Inc., freeing up resources to buy media and content businesses.

Vivendi shares have reportedly gained in value by 15% this year. Revenue at Universal Music also rose in the first quarter of this year, after declining in 2014 as the company’s digital sales and improvements in its licensing business paid off.

According to Liberum analyst Ian Whittaker in a recent report in Bloomberg, the plan may point to a shift to more paid subscription models, where labels and artists ‘take home’ most of the subscription fee, instead of ad-funded ‘freemium’ services such as Spotify. It also means that Vivendi is committed to Universal Music, and won’t sell or spin off the label in the near term, he added.

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