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Universal Music Group can trace its history almost as far back as recorded music has been offered for sale to the public. Great music, then and now, has always been central to the company’s success—proven by an artist roster that is an authentic who’s who of music through the decades. Today, Universal Music Group leads the industry, with a one-third share of the global market.
It’s maintained that leading position by being able to change its business model to accommodate the needs of consumers as they have evolved. And how consumers want their music today has changed music business models out of all recognition. Global digital music revenues to record companies are growing at an ever faster rate—up 8% to USD5.2bn in 2012. And as the digital revolution proceeds, it has driven major change and innovation in the way that Universal Music manages and distributes its content to a growing range of business partners, retailers and direct to consumers.
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As early as 2007, Universal Music recognized a growing challenge with its digital supply chain. With a fast-developing range of partners requiring digital content, the spread of mp3 players, and ceaseless innovation creating new channels to market, the company needed to find a way to manage all of its digital assets without incurring significant additional costs in meeting new and emerging demand.
Universal Music concluded that it needed to make a decisive shift to a digital supply chain solution that could continuously adapt to consumer preferences as they evolved. The decision to change generated a number of key questions—principally whether to make the major investments in hardware and software to build a platform in-house, or to find an alternative approach with a partner.
Having assessed the capabilities and assets required to make the successful transition to a flexible and agile digital supply chain, Universal Music selected Accenture as its long-term outsourcing partner.
Accenture managed the roll out of the Digital Supply Chain platform (DSC), providing Universal Music with a sophisticated platform that provides total transparency into all of the activities taking place across its entire digital operations at any one time. Accenture and Universal Music continue to work together to develop and improve the platform and what it offers in line with changes in consumer and business demand. Recent developments include creating direct to consumer capabilities providing a retail environment that generates a more direct connection between the company’s artists and their fans. In addition, the platform is also able to make a considerable back catalogue available as well as other forms of previously unused material and formats—such as artist interviews, electronic press kits and high-definition video content - that are now enabling new ways to generate revenues and increase the appeal of Universal Music’s content.
In the DSC, Accenture has delivered and operates a dynamic platform that continues to adapt as the market changes and Universal Music responds accordingly to capitalize on new and different opportunities. Today, the DSC enables Universal Music to serve 1,000 business partners in 200 territories across the globe. If required, this platform can ramp up quickly to meet demand and can deliver 1,000,000 products to Universal Music’s business partners in a day. In addition, in 2012, it enabled the distribution of 25,000 new product releases.
The DSC delivers a compelling value proposition that consists of five pillars:
With the demand for digital music growing at an unprecedented rate, the DSC continues to provide a platform for growth and innovation that will position Universal Music for high performance well into the future of the digital music industry.
“Now I can shift my focus from dealing with problems to look at what needs to be built in the system to serve future needs. We need flexibility now more than ever and we need Accenture to complete our mission” Stephan Garandet, VP Systems & Strategy and VP Digital Operations, Universal Music Group International.
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