An in-depth analysis exploring Universal Music Group's (UMG) internal and external forces: SWOT, PEST, Porter's Five Forces. We look at the current the current market share and cultural shifts and provide recommendations that align with their mission statement.

1. T E A M 3

2. v i s i o n
“We are UMG, the Universal Music Group.
We are the world’s leading music company.
In everything we do, we are committed to artistry,
innovation and entrepreneurship…”

3. 1937
1999
2001
2004-08
2011
2014
Start of Universal
records 1934 as
Decca records
Ploygram (Major record Label
Philips) acquired bySeagram.
Segram merged in to UMG
UMG acquired an online subscription
music service, EMusic.com, which it
used to help grow digital sales and
internet related operations
- UMG separated from Universal Studios
- Made over six acquisitions making it the largest
music catalog in the industry
- Acquitted by Vivendi
- Acquired BMG Music Publishing making it the
largest music publisher
- Acquisition of Univision Music Group
Acquisition of EMI
Universal Music announced the
disbandment of Island Def Jam
Music, one of four operational
umbrella groups within Universal
Music
t i m e - l i n e

4. o rga n i z a t i o n a l S t ru c t u r e
Lucian GraingeMichelle Anthony

5. b r a n d s

6. s wo t - s t r e n g t h s
Strengths
Large global and local market
Large parent company
Strong management
Brand recognition
Artist portfolio
Large market share
Influential celebrity power
Rich history
Vevo partnerships
Artist placement
Opportunities
Diverse consumer base
Innovative distribution channels
New technologies
More fusion of genres
Festivals, concerts, events collaborations (U-Live)
Transformation from physical to digital
Access to new talent
Threats
International competition
Government regulations (copyright)
Volatile costs
Individual artists
Music value to consumer (price)

7. s wo t - O P P O R T U N I T I E S
Strengths
Large global and local market
Large parent company
Strong management
Brand recognition
Artist portfolio
Large market share
Influential celebrity power
Rich history
Vevo partnerships
Artist placement
Opportunities
Diverse consumer base
Innovative distribution channels
New technologies
More fusion of genres
Festivals, concerts, events collaborations (U-Live)
Transformation from physical to digital
Access to new talent
Weaknesses
Piracy
File Sharing
Technology changing music trends
Lack of discovery
High risk industry
Uncertainty regarding artist deals

8. Weaknesses
Piracy
File Sharing
Technology changing music trends
Lack of discovery
High risk industry
Uncertainty regarding artist deals
s wo t - W E A K N E S S E S
Threats
International competition
Government regulations (copyright)
Volatile costs
Individual artists
Music value to consumer (price)
Opportunities
Diverse consumer base
Innovative distribution channels
New technologies
More fusion of genres
Festivals, concerts, events collaborations (U-Live)
Transformation from physical to digital
Access to new talent

9. Threats
International competition
Government regulations (copyright)
Volatile costs
Individual artists
Music value to consumer (price)
s wo t - T H R E AT S
Strengths
Large global and local market
Large parent company
Strong management
Brand recognition
Artist portfolio
Large market share
Influential celebrity power
Rich history
Vevo partnerships
Artist placement
Weaknesses
Piracy
File Sharing
Technology changing music trends
Lack of discovery
High risk industry
Uncertainty regarding artist deals

10. m u s i c i n d u s t ry r e v e n u e s
DIGITAL
DOWNLOADS
37%
STREAMING
27%
PHYSICAL
32%
RING-TONE
1%
SYNCHRONIZATION
3%
2009 2010 2011 2012 2013 2014
4.4
4.7
5.3
6.0
6.4
6.9
GLOBAL DIGITAL
DOWNLOAD
REVENUE
(USD$ BILLIONS)

11. p e s t - p o l i t i c a l
Political
Global industry - affected by many
political environments
Industry employment falling caused by piracy and
transformation of music retail and consumers
Legal development of protecting
intellectual property worldwide
Independent labels are predicted to grow,
taking market share from the major labels
Tax systems and trade barriers
affecting the business
Economical
Piracy: 12.5 million losses in music industry
Industry is in a decline
Projected annual growth 1.7%
Forced to change their business plan
and channels of distribution
High cost to run a record label today-
making money means spending money
Technological
Development of blocking known piracy systems
Becoming easier for independent artists to record,
market and distribute on their own
Technological development working against
the set-up known today, but may be the way
for a new industry structure

12. Economical
Piracy: 12.5 million losses in music industry
Industry is in a decline
Projected annual growth 1.7%
Forced to change their business plan and
channels of distribution
High cost to run a record label today
- making money means spending money
We are out of the crisis
- but how has it affected people’s value of music
Globalization as a benefit, but can
also bring competitors
p e s t - e c o n o m i c a l
Political
Industry employment falling caused by piracy
and transformation of music retail and consumers
Legal development of protecting intellectual
property worldwide
Independent labels are predicted to grow, taking
market share from the major labels
Tax systems and trade barriers
affecting the business
Social
Change in consumer habits:
How they listen to music, how they purchase
(more individual track purchases than albums)
Devaluation of music value in consumers eyes
(Cheaper through streaming services or illegally)
Controlling market: Having the funding
and control to decide what music goes
mainstream Social media
and streaming services

13. p e s t - s o c i a l
Social
Change in consumer habits: How they listen to
music, how they purchase
(more individual track purchases than albums)
Devaluation of music value in consumers eyes
(Cheaper through streaming services or illegally)
Controlling market: Having the funding and
control to decide what music goes mainstream
Social media and streaming
services affecting market
Economical
Piracy: 12.5 million losses in music industry
Industry is in a decline
Projected annual growth 1.7%
Forced to change their business plan
and channels of distribution
High cost to run a record label today-
making money means spending money
Technological
Development of blocking known piracy systems
Becoming easier for independent artists to record,
market and distribute on their own
Technological development working against
the set-up known today, but may be the way
for a new industry structure

14. p e s t - t e ch n o l o g i c a l
Social
Change in consumer habits:
How they listen to music, how they purchase
(more individual track purchases than albums)
Devaluation of music value in consumers eyes
(Cheaper through streaming services or illegally)
Controlling market: Having the funding
and control to decide what music goes
mainstream Social media
and streaming services
Technological
Basic technology needed to listen music -
getting more accessible globally
Development of blocking known piracy systems
Becoming easier for independent artists to record,
market and distribute on their own
Technological development working against
the set-up known today, but may be the way
for a new industry structure
Streaming business increasing sales by 19%
Political
Industry employment falling caused by piracy
and transformation of music retail and consumers
Legal development of protecting intellectual
property worldwide
Independent labels are predicted to grow, taking
market share from the major labels
Tax systems and trade barriers
affecting the business

15. p o r t e r
Rivalry Among Existing Competitors
HIGH
Growing competition and rapidly
shifting consumer preferences
Bargaining Power of Customers
HIGH
Large variety in the market
free music
genres
artists
experiences
distribution channels
Bargaining Power of Suppliers
MODERATE
Suppliers = artists
Artists have choice to choose
between different companies
Established artists have the power
to negotiate pricing and deals
Threat of substitutes
HIGH
battling against
radio
television
social media
internet
piracy
Threat of New Entrants
LOW-MODERATE
High Barriers of Entry
Low startup costs for independent artist, ie. Soundcloud
High time costs to bring artists/products to market
High financial cost and risk:
- acquiring talent and music
- distribution
- marketing

16. m a r k e t s h a r e
SONY
36.6%
WARNER
22.2%
UMG
41.2%
UMG lost market share in 2014, mainly
as a result of the sale of the Parlophone
Label Group (PLG) to WMG in 2013,
which formed part of EMI Recorded
Music acquisition requirements. UMG’s
loss was WMG’s gain and the smallest
of the three majors narrowed the gap
on second-placed SME.
Sony/ATV held its lead in music pub-
lishing, but the collective share of the
independent publishing sector was the
highest overall.

17. a n a lys i s . p e rs p e c t i v e
Contracts:
Before: Record labels limited to producing, distrib-
uting, market and selling recorded music.
Now: Labels receive income from other sources, art-
ists earnings (live performances), merchandise sales,
publishing, commercial endorsements (360)
Needs to be beneficial for both parts - unique talent
to make the deal profitable
Streaming - competitor or partner? (Pandora, Spoti-
fy, Deezer, Youtube, etc)

18. o u r r e c o m m e n d a t i o n s
- Stay up-to-date with consumer trends shifts in social
media and music
- Look into Streaming and other distribution channels!
- More research and development with technology to
result in faster growth
- Get a more diverse group of artists.. Don't be afraid
of new and unique talents
- An effort is events and festivals
- Expand into emerging markets

19. c o n c l u s i o n
Technology is an important factor that has completely changed the industry
UMG is a big powerful entertainment company with an established history of popular artists and genres
UMG can continue their success by staying up to date in market trends with continuous innovation
Make music valuable for consumers again
Finding a solution to the “streaming issue” - clear strategy needed to overcome this obstacle

20. v i v e n d i ’ s f i v e y e a r s t r a t e g y
VIVENDI’S FIVE-YEAR DEVELOPMENT PLAN FOR UNIVERSAL MUSIC GROUP
“UMG will accelerate the monetization of music on digital channels, broaden the reach
of its audio and visual content through multiple partnerships with platforms and strengthen
its strategic relationships with brands and sponsors. It will pursue its industry-leading track record
of talent management and development. UMG will also continue investing in high-potential
markets for music, such as Africa, India and China.” - Vivendi press release on July 31, 2015