Lucian Grainge, Chairman/CEO, Universal Music Group
LUCIAN GRAINGE, 55
Chairman/CEO, Universal Music Group
Last Year's Rank: 1
On the second workday of 2016, Universal Music Group chairman/CEO Lucian Grainge flew to Las Vegas for CES, the annual consumer electronics show. For three days, Grainge and a handful of his top executives held almost nonstop meetings in a suite at the Wynn Las Vegas with electronics manufacturers, ad-tech startups and consumer-goods companies. One night, Grainge co-hosted, with Condé Nast CEO Robert Sauerberg, the annual dinner put together by the high-powered consultancy MediaLink, which attracted top executives from companies not normally identified with the music business, including GE, WPP and Unilever. Grainge provided some music-business cool in the form of a jazz performance by Lady Gaga.
Record labels never have had a major presence at CES, which focuses on gadgets, not media. But Grainge has made it a priority to promote the value that his 7, 500-employee company and its artists can bring to other businesses - technology, marketing, even film. The latest example: a deal with iHeartMedia, announced at CES, to develop virtual reality content around UMG's artists. "I want us to help set up the future and take advantage of the opportunities that technology and a global market give us, " says Grainge, who moved from his native London to Los Angeles in 2010 and took over UMG in 2011. "We as music companies have to be part of that conversation."
Under Grainge, UMG has become what may be the most dominant company in the history of the recorded-music business. It boasted seven of 2015's 10 best-selling albums and 38.5 percent of the year's recorded-music sales, according to Nielsen Music. It has all five Grammy album of the year nominees: Kendrick Lamar, Taylor Swift, The Weeknd, Chris Stapleton and Alabama Shakes; the second-biggest music publishing company; and a fast-growing merchandising division that has deals with The Beatles and The Rolling Stones. Its core business is growing - overall revenue for the first three quarters of 2015 increased 2.1 percent on a currency-adjusted basis over the same period in 2014 - and parent company Vivendi recently signaled its approval by extending Grainge's contract through 2020.
Streaming now accounts for half of UMG's digital revenue, and Grainge wants to get the best deals possible from technology companies. "Everything that we're doing as an organization is to create competition within the market, " he says. A few weeks ago, UMG announced a licensing agreement that Grainge hammered out with SoundCloud CEO Alexander Ljung. The Berlin-based startup plans to launch a paid streaming service, and the deal lets UMG reserve some of its music for subscribers - a provision important to Grainge because of the precedent it sets for other services. Sources say UMG has had no long-term contract with Spotify for months. (Although both companies declined to comment, they continue to do business.)
"The reality is that we're the underdog in these discussions, " says Grainge about negotiations with tech firms. "These platforms have access to their own data, hundreds of millions of consumers, and they're structured globally - and that's really a first for content delivery."
Grainge, a former A&R executive who worked with acts from Eurythmics to Amy Winehouse, still runs UMG as a company that's "dominated by the creative process, " he says. "The first conversation we have every month is: ‘What do you have to play me? What's the hit? What's the next single?' " When acts succeed, though, he wants to leverage the resulting assets in ways that go beyond sales and subscriptions. UMG produced the Oscar-nominated Winehouse documentary Amy, and along with corporate cousin StudioCanal has invested in Lee Daniels' just-announced documentary on the Apollo Theater, as well as Ron Howard's upcoming movie about The Beatles. (UMG owns the band's recordings.)
Grainge - who has a son from his first marriage and a daughter and stepdaughter with his wife, Caroline, with whom he lives in Pacific Palisades, Calif. - made it a point to forge connections in Hollywood. "Lucian has built powerful relationships in the world of media and entertainment, " says Jim Gianopulos, chairman/CEO of Twentieth Century Fox Film, a friend for six years. Grainge has served on the board of DreamWorks Animation since 2013, and his friends include such media heavyweights as Snapchat CEO Evan Spiegel and Eddy Cue, who runs Apple's Internet software business. "He's a Renaissance man, " says Gianopulos, "with both strong creative and business instincts." This year he'll apply those instincts, which have served him so well in the music industry, to other aspects of the media business. "I want us to become a multifaceted entertainment company, " says Grainge. "I want us to go from underdogs to being on an equal footing."