Retailers: Streaming ’exclusives’ works against growth

Digital music retailers have come out in support following reports that Universal Music has banned “exclusives” with streaming platforms – the key for the likes of Spotify, Apple Music and Tidal to build up user and subscription figures.

Universal has yet to comment on the reports. In any case, the Entertainment Retailers Association (ERA), which represents UK digital music services and music retailers, has applauded the move. It says that exclusives ultimately confuse consumers and work against the growth of the streaming sector.

After all, 68 million music fans around the world subscribe to streaming services. Why cut them out to do a deal with Spotify (30 million subscribers), Apple Music (15 million) or Tidal (4 million)?

ERA CEO Kim Bayley says: “The proliferation of exclusives means consumers are effectively forced to take out multiple subscriptions to gain access to all key releases. We believe this is damaging not just to individual services but to the market as a whole. We welcome reports that Universal is now moving away from exclusives and call on other labels to follow their lead.”

According to Billboard, Universal’s decision came after the release of Frank Ocean’s latest releases. After a four-year silence following the 2012 album Channel Orange, Ocean released two products.

One was the visual album Endless, released as an Apple Music video stream via Def Jam/Universal Music Group, to whom he owed an album. It was followed 24 hours later by the 17-track album Blonde, (or Blond as it is known in the US) released as an Apple exclusive a day later on Ocean’s own label, Boys Don’t Cry, without Def Jam’s – or Universal’s – involvement.

With an advance from Apple, Ocean paid Def Jam back the $2 million it put into making the album. Hence neither Def Jam nor Universal Music had any recoupable claims on him, and he fulfilled his contractual obligations to them.

Billboard explains, “Ocean fulfilled his contractual obligations and increased his potential profit share from 14% to 70% of total revenues from Blonde within a 24-hour period, seemingly pulling a fast one on the biggest music company in the world in the process.

“Def Jam and its parent Universal, stuck with an overshadowed visual album that isn’t for sale, and cut out of any revenue from the ‘proper’ album that’s headed to the top of the charts on the strength of 225,000 to 250,000 equivalent album units earned in the week ending Aug. 25, were left with what amounts to a very long music video and without one of their marquee artists.”

As a result, UMG Chairman/CEO Lucian Grainge reportedly told his executives two days later that striking exclusives on one platform, and globally, were over.

Whether Universal takes legal action against Ocean remains to be seen. Also in the “watch this space” category is if Sony Music and Warner follow suit.