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“The fact is: no matter how much we might work to build “IDJ” as a brand, that brand could never be as powerful as each of IDJ's constituent parts.”

CH-CH-CH-CHANGES: INTERNAL MEMO FROM LUCIAN GRAINGE

UMG’s Ruler’s Explanatory Message to Staff Accompanied Official Announcement

Dear Colleagues:

Today we’re making some important changes to our U.S. East Coast operations which I want to share with you.

Def Jam, Island and Motown will now once again become stand-alone labels within UMG. I want to take this opportunity to tell you the reasons why we're taking this historic step.

Over the past few years, we've made enormous strides in putting entrepreneurship at the center of our company. Today, UMG is a collection of some of the finest and boldest creative enterprises competing in the music marketplace; at times, even competing against each other.

But, in addition to competing, our companies also share many things including a worldwide network of marketing and promotional resources and a powerful global infrastructure. Perhaps most importantly, however, they share common values: a dedication to artistry, innovation and risk-taking that has made UMG the best music company in the world.

Part of the challenge of continuing to be the best is constantly re-evaluating our organization and ensuring that we maintain the proper balance between cooperation and competition among our labels. That balance can only be achieved by putting in place the structure that will best foster creativity, innovation and the entrepreneurial spirit. That’s why we’re unpacking IDJ into its original iconic stand-alone labels. The fact is: no matter how much we might work to build "IDJ" as a brand, that brand could never be as powerful as each of IDJ's constituent parts.

Going forward, Def Jam, Island and Motown can now separately recapture and exploit the uniqueness of their respective brands, serving artists with the singularity of vision, focus and creativity that was at the core of their initial successes, while still being able to take advantage of UMG's global reach.

Obviously, with the change in structure, each individual label will have its own management. With this shift, Barry Weiss has decided to step down from his current position so we can enter into discussions about a new venture with UMG.

Barry is an exceptional music executive, and I’m enormously grateful for all of his invaluable contributions during a time of transition for our East Coast companies. He has positioned Def Jam, Island, Motown and Republic to where they are today poised for even greater levels of success and we’d love to keep him in the family.

As part of the new structure, we'll be bolstering our East Coast labels with some additional executive resources and new approaches to support their artists. More details are available in the press release below. I recognize that those of you who work in East Coast shared services and at IDJ will have questions and we will be holding meetings where all the questions you may have will be addressed. A separate email invitation will follow.

In the meantime, I want to thank you all for the role you play in making UMG the most creative and commercially successful music company in the world.

Lucian

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