Vivendi plans to expand Universal Music’s reach in Africa, China over next five years

Africa, India and China are “high-potential markets for music”.

VIVENDI has announced a five-year plan to expand the reach of Universal Music Group by investing in digital channels, new countries and adding partnerships. 

Universal Music’s Chief Executive Officer Lucian Grainge has agreed to stay on at the record label until at least 2020, the French media group said in a statement Friday. 

Chairman Vincent Bollore is working to transform Vivendi, selling off the company’s telecommunications assets and making acquisitions in media and entertainment. 

Revenue at Universal Music rose in the first quarter after declining in 2014 as the company’s digital sales and improvements in its licensing business paid off. In the next five years, Universal Music will invest in Africa, India and China, which are “high-potential markets for music,” and “accelerate the monetisation of music on digital channels.” 

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, Liberum analyst Ian Whittaker said in a note. 

It also means that Vivendi is committed to Universal Music, and won’t sell or spin off the label in the near term, he said. Vivendi said Thursday that it sold its remaining shares in Telefonica SA’s Brazilian phone company, exiting Brazil and further reducing its exposure to phone-company assets. 

The company’s already disposed of assets in France, North Africa as well as its holding in video-game maker Activision Blizzard, freeing up resources to buy media and content businesses. 

-Bloomberg

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