Published On: Fri, Sep 21st, 2018

Circle of Life: Elton John Stays With Music Label

Elton John re-signed a deal to stay with the world’s largest music company, Universal Music Group, in a sign there is still a place for music labels in the streaming age.

The contract with Mr. John, who kicked off a three-year-long farewell tour earlier this month in Allentown, Pa., includes recordings, music publishing, merchandising and licensing for his catalog spanning five decades and any future music for the rest of his career. Financial terms weren’t disclosed.

Elton John performs during his stop at the Bryce Jordan Center for part of his Farewell Yellow Brick Road Tour last Sunday in University Park, Pa.
Elton John performs during his stop at the Bryce Jordan Center for part of his Farewell Yellow Brick Road Tour last Sunday in University Park, Pa.  (Abby Drey / The Associated Press)

With the expiration of his old arrangement with Universal, the 71-year-old Mr. John could have opted to release his own music without a label, a possibly more profitable path that some artists—such as Prince, the Eagles and Garth Brooks—have pursued. The role and need of music labels have been questioned in recent years as the rise of music-streaming services have made music more accessible to listeners.

Universal Music Chief Executive Lucian Grainge said the company, a subsidiary of Paris-based Vivendi SA, has had to evolve in recent years from more than just a “label” or “publisher.”

“How we market and promote music has been smashed into a million smithereens,” he said. “We’ve moved from being a recording company into being an entertainment company.”

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Universal Music—where Mr. John has spent most of his career—has been key in adapting his catalog to the digital age, said David Furnish, CEO of Rocket Entertainment, Mr. John’s management company. Mr. John is the No. 1 streaming solo artist from the 1970s.

“We’ve gone through this incredible upheaval in the music industry,” said Mr. Furnish, who is also Mr. John’s spouse. “The old rulebook has been thrown out. But there are exciting ways of doing things now and keeping music alive.”

The latest deal, involving multiple rights over many years, could generate well over $ 100 million in revenue for Universal Music and Mr. John, according to estimates from people who work in the music industry.

Last year Universal Music commissioned young filmmakers to make music videos for Mr. Elton’s classic hits that didn’t have them, including “Rocket Man,” “Benny and the Jets” and “Tiny Dancer.”

“Now we have more of a presence on YouTube, and the noise around the competition got new, younger ears engaging with us for the first time,” Mr. Furnish said.

David Joseph, CEO of Universal Music U.K., said that while Mr. John’s older core audience continued to buy downloads and physical albums—he has sold more than 300 million albums—he saw streaming as an opportunity to attract new listeners. He now attracts more than 11 million monthly listeners on Spotify.

Earlier this year Universal Music released two albums, “Revamp” and “Restoration,” that featured cover versions of Mr. John’s songs by younger artists like Miley Cyrus, Lady Gaga, Kacey Musgraves and Ed Sheeran.

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Mr. Joseph said Universal Music’s approach to promoting artists of Mr. John’s vintage has changed. It used to focus on a creating a frenzy of activity around new albums, with lulls in between. Now, the goal is to generate continuing interest, largely by branching out beyond broadcast radio, which historically has been record labels’ main avenue for promotion.

“You have to have an always-on approach,” he said. “We don’t think of it in the cycle of an album anymore. We’ve got a team of people thinking about how to get his music out every single day.”

Getting a song featured in an advertisement or film, for instance, isn’t only lucrative as a transaction but can introduce that music to new listeners.

“It can create a cascade of demand because in this world of on-demand you can ask for it or you can type it in,” Mr. Grainge said.

Mr. Furnish said there are two projects coming next year where he sees a relationship with a record company as fundamental: a biographical film about Mr. John called “Rocketman,” as well as a memoir.

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Circle of Life: Elton John Stays With Music Label