Sir Lucian Grainge, chairman and CEO of Universal Music Group, the world's largest music company, is curious, empathetic, and, if not exactly humble, a master of humble braggadocio. His superpower is his humanity. Grainge, a 63-year-old British man, was knighted in 2016 for his contributions to the music industry and has topped Billboard's Power 100 list of music industry players multiple times over the past decade. is compact and a little chubby. Attentive eyes behind owl glasses. He's not trying to get attention. He runs a public company worth more than $50 billion, but he could also be a small business owner selling music out of a London shop, like his father, Cecil. On earnings calls, Mr. Grainge may sound more like a London taxi dispatcher than a chief executive. But woe to those who mistake his European politeness for a lack of competitiveness. “He's very deceptive with that little gentle face and those little glasses,” Doug Morris, former UMG chairman, told the Financial Times in 2003, when he was still Grainge's boss. “Behind them, he's actually a killer shark.” In 2011, Grainge devoured Morris' work.
As leader of UMG, he helped solidify Universal's dominance as the largest of the three major label groups, overtaking Warner Music and Sony. Of the 20 most streamed artists of all time on Spotify, more than half are signed to his UMG label. But Grainge is also a consummate musician, with his 45 years of experience in both the publishing and label businesses. He oversees a long list of formerly independent labels, including Interscope, Republic, Capitol, Motown, and Island. “Lucian is like the commissioner of the league,” Monte Lipman, who founded Republic with his brother Avery, told me. said Don Was, head of UMG's celebrated jazz label, Blue Note. He can work in the world of art or he can work in the world of finance, which are two completely different things. ”
Grainge lives and works in Los Angeles, but the West Coast fitness culture hasn't converted him yet. He doesn't ski or play golf, but he sometimes drives carts for other golfers and runs errands between holes. He doesn't drink or smoke, and when it comes to drugs, he said, “I panic when I have to take an aspirin.” He was a family man, and his first wife Samantha Berg suffered complications while giving birth to her son Elliot in 1993 and spent the rest of his life in a coma. That deep loss greatly affected his worldview. Any professional experience. In March 2020, Grainge was among the first wave of coronavirus cases in Los Angeles, spending 18 days on a ventilator and nearly dying. After his recovery, he said in his office last November that he has survivor's guilt. “Why me?” he kept asking himself.
Grainge's son Elliott, now 30 and a record man himself (his label 10K Project has signed Gen Z sensations Ice Spice), told me, “I We're not from Hollywood.” He added of his father: “He doesn't put on a show or a front like a lot of people here. He's a completely different personality.” He comes from a closed Jewish community in north London. He has a village mentality. ”
Still, thanks to music, Grainge became a very wealthy villager. One British music executive told me: “Winning means more to him than it does to anyone I've ever met in the music industry.” Money is just a means to keep score. Mr. Grainge's annual salary is $5 million, relatively modest for his position, but he received a $150 million bonus for successfully taking UMG public in 2021. Some shareholders objected to the amount of this “transition” compensation. , consider it “excess”. In the UK, Grainge's pay package was even debated in parliament in the context of legislation to promote fairness in the music business. Conservative MP Esther McVeigh said: “It's shocking that record label owners make more money from artists' work than the artists themselves.”
Grainge lives in a Pacific Palisades mansion with his second wife, Caroline, whom he married in 2002, and with whom they raise their daughter Alice and stepdaughter Betsy. When he received a star on the Hollywood Walk of Fame in 2020, Lionel Richie, longtime Universal artist and father of Elliott's wife Sophia, honored him at the ceremony. (“That’s real copyright!” Grainge approvingly told me about Ritchie’s evergreen “Hello.” “It’s a wedding and bar mitzvah song!”) He is highly regarded by both sides of the house and is a very difficult duo. To pull them apart.
Bono, an old friend of his and a member of Island's band U2, told me: “Lucian does not apply varnish. If you are looking for Lucian's varnish, you had better drink it. The music business can be a dizzying world. But for those who want to know where the doors, walls, and windows are, the facts are familiar and the white crown varnish is a pat on the back. It's more approachable when it's not attached.'' That's the attitude music industry executives often have toward artists. Bono gave me a Grainge impression. “You can't do that, buddy!” he barked. “No! It won't. It won't happen!” Additionally, as a musician, “It's so much more comfortable when you don't have to negotiate with Janus-faced guys, when you know who you're in the room with.” ” he added.
That doesn't mean Grainge is always easy to understand. He loves and collects outlandish car analogies. When Grainge first met British singer-songwriter Jamie Cullum, he declared: You're like an F1 sausage roll.'' The exchange is recorded for posterity in a cartoon drawn by Callum that hangs on the wall outside Grainge's office. “He speaks in riddles, which I find endearing,” Jodi Garson, who runs UMG's global publishing company, told me. “The weird references to British history, the Yiddish stuff, and sometimes he says, 'You know what I mean?' And I admit things that I don't admit? He once said, 'You know what I mean?' He said to me, “Jody, I think like a jazz musician.'' You don't always know exactly how you're going to get there, but you know where you're going to end up. ” Lucien always knows what he is doing and that is his process. ”
Among investors, Mr. Grainge is seen as an executive who strategically used technology to reshape industry business models. In a 2021 investor presentation, Bill Ackman, whose hedge fund Pershing Square Capital Management owns 10% of UMG shares, discussed Grainge's influence on the music business as Netflix's Reed Hastings on television and Compare it with the impact it had on the film industry. He also likens Grainge to Walt Disney and Steve Jobs. Full Stop Management's Irving Azoff said Grainge, who attracted Ackman's fund and Chinese tech conglomerate Tencent, which owns 20% of UMG, rivals the firm's roster of global superstars. He said he has built a global investor base. As a result, the value of the music industry as a whole, which has “traditionally always been undervalued,” has increased, Azoff said.
In Grainge's 45 years in business, everything about the way people create, sell and consume music has changed. Distribution, which once required a label to physically deliver records to stores, is now as easy as pressing the upload button. Promotion of new music, once controlled by labels by radio DJs, now takes place on streaming platforms where playlists are determined by algorithms. Products exist in the cloud, and the revenue previously derived from album and single sales has been replaced by recurring royalty payments from streaming services. Music executives who once came from the recording industry, like Mr. Grainge and Sony Music boss Rob Stringer, are now lawyers, private equity managers, turnaround experts, or Robert Kinkle. likely to be a technology leader. Warner, who was recently named CEO of his Music group, was previously an executive at YouTube.
But unlike other creative industries, such as print media, television and film, which have struggled to adapt to similar digital transformations, the music industry, after experiencing severe contraction in the first decade of this century, is now It looks like it's more profitable than ever. Streaming revenue alone is reportedly expected to exceed $17 billion by 2022. Arguably more than any other executive, Mr. Grainge resisted dire predictions of the industry's impending demise in the early 2000s. How did he manage it? After all, even though UMG controls the content, Google, Apple, Microsoft, Meta, etc. control the content. Own the technology.
“Please let me out. I'll expose you.”
Cartoon by Benjamin Schwartz
“It's called 'wriggling,'” Grainge told me on a gray November day in his large sixth-floor corner office. He was sitting at a rectangular table with his back to a window facing east toward downtown Santa Monica. Amy Winehouse's autographed guitar was nearby. He held out his hand and wiggled it, his fingers moving like a fish sniffing through coral. “You have to figure out if you’re going to go up, down, sideways or through.”
In March 2023, Neil Mohan, who had just become YouTube's CEO, received a message from Grainge that read, “Congratulations, Neil. When can we meet?” Mohan told me: “Lucien was typical of Lucien in that he was warm and friendly, but it was clear that he had a real urgency to talk.'' The subject was AI.
A.&R.'s scouts are said to have ears, and Grainge has an impressive pair of ear appendages that move up and down the sides of his head when he speaks. But Grainge uses his nose. “I could always intuitively sniff out what the next scene was,” he said. “Whether it's punk or the New Romantics, I've always enjoyed and embraced that. That's how I look at technology.” Generative AI, which can generate novel images, text and music, is his next move. I could smell the big scene. “That’s all I am, a talent scout.”
The industry is facing another revolution, but it's not yet clear what that will be. Is AI a format change in the way music is consumed, like the move from vinyl and cassettes to CDs, or is it a threat to business models, like free downloads and file sharing? Is it a new kind of digital workstation for creating music, or a new radio, a platform for promoting artists and engaging with fans? Is a new era of musical invention on the horizon? Or is it a new era of musical invention? Will AI cripple human creativity?
In April 2023, an anonymous producer known as Ghostwriter used AI audio reproductions of Drake and The Weeknd to create a deepfake duet called “Heart on My Sleeve.” The “Fake Drake” song quickly went viral, sending waves of fear throughout the industry. Universal's stock price fell about 20% from February to mid-May due to concerns that generative AI would erode the value of copyrights. (The stock has since recovered and is nearing all-time highs.) Grainge invited me to imagine an illegal version of a Kanye West song featuring Taylor Swift's voice. And then it gets into some platform and someone starts monetizing it. '' He added, “I didn't spend 45 years in this industry just to have free rein to do whatever I wanted. That's not going to happen while I'm here!'' At the same time, we didn't want to miss out in case AI-generated material could become a new source of income for artists and their labels.