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Universal boss says freemium and premium “in proper relationship” will make everyone a winner, as major gets close to SoundCloud deal

By Chris Cooke | Published on Tuesday 18 August 2015

So, the freemium debate continues unabated in music circles. And with a decent chunk of that debate so far this year framed around speculation that Universal Music’s policy on free-to-access music is in flux, it was interesting to see the top man there – your good mate Lucian Grainge – chat about the whole thing in an interview with Hits last week.

But, Mr Grainge, what we in the press want to know is this: are you bloody well ‘for’ or bloody well ‘against’ ad-supported on-demand music consumption. That’s the big question I think we can all agree. “A lot of the press coverage … has degraded the conversation to the point where you’re cast as either ‘for’ or ‘against’ ad-supported on-demand music consumption. Clearly, it’s not that simplistic”. Oh.

But surely, sir, ad-supported on-demand music has a place, whether as part of discovery or trials of new products, even if freemium alone is inadequate to support the critical ecosystem of artists, labels and the platforms themselves?

“As I’ve said before” says Grainge, “while ad-supported on-demand music definitely has a place, whether that’s as part of discovery or trials of new products and offerings, freemium alone is inadequate to support our critical ecosystem of artists, labels and the platforms themselves”.

Yeah, having claimed I’m degrading the conversation, I’m pretty sure you just nicked what I said there. “What that means”, he went on, “is that we must seek the proper balance between ad-supported and paid subscription. It’s not one or the other. With the two approaches in proper relationship, we can continue the level of investment we make in artists who then, in turn, can be fairly compensated for their work. If we get that right, everyone wins”.

It’s true you know. Everyone’s a winner baby, that’s the truth. Talking of which, sort of, what about bloody SoundCloud? Where does that fit into your plan Mr Grainge?

Well, he didn’t talk about SoundCloud in that interview, though sources have told MBW that the mega-major is now very close to having a licensing deal in place with the popular free-to-access music service, as it goes from being a neither-ad-funded-nor-subscription platform to being both. Maybe even with the two approaches in proper relationship.

But, say MBW’s sources, it’s thought Universal is now close to inking a deal, which will include some of those useful guarantees and advances, and some lovely equity. It’s thought Warner got 5% of SoundCloud as part of its deal, and Universal will likely want more, given label equity is usually divvied up based on market share.