UNIVERSAL MUSIC GROUP STRENGTHENS COMMITMENT TO E-COMMERCE ACTIVITIES WITH FORMATION OF NEW DIVISIONS
Universal City, California—January 18, 2000—Universal Music Group (UMG) has expanded and realigned its e-commerce activities. Its Electronic Commerce and Advanced Technologies (eCAT) unit has been redesignated Universal eLabs and it has established a separate business unit, Global e. This restructuring establishes separate units with specific responsibilities in this important and growing area of the entertainment business and it clarifies accountability for transformation of the base music business to adapt to the changing digital world.
Universal eLabs will be UMG’s center for developing global strategies within the e-commerce realm and seeking out investment opportunities. It will house a business incubation group that will develop new businesses internally which will be “spun-off” into either existing operating units or new free-standing divisions. Universal eLabs will include in-house research & development as well as a business development staff to support all of UMG’s e-businesses. Larry Kenswil, formerly President of eCAT, will serve as President, Universal eLabs, based in Los Angeles; Michael Bebel, formerly Senior Vice President, Business Development and Strategic Planning, eCAT, will be the division’s Executive Vice President based in New York. Universal eLabs will report to Zach Horowitz, President and Chief Operating Officer, UMG.
Global e will be a new stand-alone division with a broad mandate to build and manage music businesses. This will include all digital download, subscription, custom radio and pay-per-play businesses around the world, through all digital channels of purchase such as kiosks, computers, TV set top boxes, and portable devices. Heather Myers will serve as Global e’s Executive Vice President/General Manager. Ms. Myers formerly coordinated the Universal/PolyGram merger activities before assuming the post of Senior Vice President, Operations, eCAT. Global e will report to Bruce Hack, Vice Chairman, UMG, who will focus the majority of his time on these activities.
Also, Norman Epstein, Executive Vice President, UMG, will take on additional responsibilities to identify areas within UMG’s core business operations that require transformation in order to succeed within the emerging digital world and develop strategies to achieve those goals. As examples, this includes a suite of e-commerce services for UMG artists, the further development of consumer databases, and the updating of business systems. Mr. Epstein will continue to report to Mr. Horowitz.
Tim Bowen, Executive Vice President, Universal Music International, who has been working closely with eCAT on e-commerce issues for the international marketplace, will now play an active role with all three new areas.
Messrs. Hack and Horowitz will report on all e-commerce activities to both Edgar Bronfman, Jr., President and Chief Executive Officer, The Seagram Company Ltd., and Doug Morris, Chairman and Chief Executive Officer, UMG. This restructuring gives Mr. Bronfman, Jr. direct accountability for the company’s global e-commerce development, reflecting the importance The Seagram Company has placed on this area to grow its business and remain an industry leader.
“The e-commerce and advanced technology fields offer unprecedented opportunities for growth within all of Seagram’s businesses, particularly our music business,” commented Mr. Bronfman. “The technological revolution allows us to get more music to more people in more places. To reach the goals we’ve set for ourselves, it is imperative that our organization remains dynamic, focused and energized to move at a speed that outpaces that of the changing landscape. This restructuring reflects our commitment to that concept and raises our initiatives in this field to a much higher level by assigning our top executives direct responsibility for execution and performance.”
“The music business has gone through many changes over the years, but none that held the potential for such wide sweeping change as the current wave of new technologies,” added Mr. Morris. “The new digital world offers limitless possibilities: from finding new talent on the Internet to making more and more music available to having ways to interact directly with music fans globally. It is important that the Universal Music Group continues to build the type of company that can move quickly to embrace new innovations to lead the industry forward.”
“Music is one of the first content businesses that will capture enormous value via new digital avenues,” said Mr. Hack. “The range of products, methods of marketing, and points of consumer contact will explode, bringing more music to more people around the world. With this organizational change, the company is focusing priority effort on building new music businesses based on new electronic means of communication and distribution.”
Commented Mr. Horowitz, “Universal Music Group has already demonstrated its commitment to this important field through a series of important e-commerce investments and initiatives. This restructuring moves us another step forward by dedicating individual divisions to focus on specific responsibilities to be sure that we are exploring all possible opportunities.”
“For many years, Universal has been the leader in building a strategy to greatly expand the music business in the next century,” said Mr. Kenswil. “We have investigated every possible avenue that can be utilized to expose our artists to growing numbers of consumers while protecting their rights in the digital world. The wide range of joint ventures, strategic investments, and technological developments that UMG has spearheaded in the past will grow rapidly under the strong focus of Universal eLabs.”Universal Music Group is the world’s leading music company with wholly-owned record operations or licensees in 59 countries around the world. Its businesses also include Universal Music Publishing Group, one of the industry’s largest global music publishing operations.
Universal Music Group consists of record labels A&M Records, Decca Record Company, Deutsche Grammophon, Geffen Records, Interscope Records, Island Def Jam Music Group, Jimmy and Doug’s Farm Club, MCA Nashville, MCA Records, Mercury Records, Motown Records, Philips, Polydor, Universal Records, and Verve Music Group as well as a multitude of record labels owned or distributed by its record company subsidiaries around the world. The Universal Music Group owns the most extensive catalog of music in the industry which is marketed through two distinct divisions, Universal Music Enterprises (in the U.S.) and UM3 (outside the U.S.).
Universal Music Group is a unit of The Seagram Company Ltd., a global entertainment and spirits and wine company.