Following Warner Music Group’s latest quarterly earnings report, CEO Robert Kyncl on Tuesday touted the success of the Barbie movie soundtrack and the outlook for continued increases in monthly fees for music subscription services, while addressing the music major’s recent TikTok deal and AI plans.
The former YouTube top executive said that the company’s fiscal fourth quarter, started in July, was “off to a strong start with amazing releases, including Barbie: The Album” and beyond.
“Dua Lipa’s highly anticipated new track Dance The Night, which is currently number one on the official European airplay chart, kicks off the campaign for Barbie: The Album, released on Atlantic Records,” he said during the company’s earnings conference call. “Like the movie itself, the album has been a massive global cultural event, hitting number 1 in seven countries, including the U.K., Canada, Australia, New Zealand, Netherlands, Ireland and Portugal. It is the first soundtrack ever to plant three top 5 singles in the U.K.”
Citing confidentiality provisions, Kyncl didn’t share too much additional detail about a recently struck expanded deal with TikTok, but touted its importance, calling it “significantly improved.” Highlighted the Warner Music CEO: “Our deal gives our artists and songwriters access to new levels of monetization, marketing and fan development features. This is the first of its kind partnership that will also mean the joint development of additional and alternative economic models as we grow the ecosystem together.”
He added: “What I can say is this: the deal features improved monetization per MAU (monthly active user) that is comparable to other ad-supported DSPs (digital service providers), fully recognizing the value of our music and how critical it is to engagement on the platform. I was glad to have had the benefit of my experience at YouTube aligning with the music industry on solutions that work for everyone.”
Kyncl on Tuesday also highlighted “the market’s adoption of subscription price increases,” saying that it, “combined with the ongoing evolution of our key partnerships, gives us tremendous optimism for the future of streaming growth.” He lauded recent price hikes, saying they could path the way for more regular subscription fee increases in the future.
The Warner Music CEO also addressed the much-discussed topic of AI. Calling it “a creative tool,” he emphasized on the earnings conference call that “the thing that is important is: artists have a choice.” He explained: “There are some that may not like it, and that’s totally fine. And then there are some that will embrace it. And that’s also fine.” He called WMG’s key priority to “ensure that they have a choice and that something is not done to them. So that is my utmost priority here, because there’s nothing more precious to an artist than their voice, and protecting their voice is protecting their livelihood and protecting their persona. So I want to make sure that we deliver on that and at the same time we deliver on opportunities that the tools can provide them.”
Kyncl also mentioned that for the past 15 years, music companies and distribution platforms “have partnered to grow user-generated content in a multi-billion dollar revenue stream for artists and songwriters,” adding: “Today, there are obvious similarities with AI.” He told analysts that working with artists and songwriters “we are leaning in, moving fast, and working with a network of partners, including both generative AI engines and distribution platforms. Many Warner artists are already exploring impactful ways to use generative AI to create, augment and remix their music. We have some great examples from big names on the way later this quarter.”
Other artists are using generative AI for visuals and music videos, including metal band Disturbed and Linkin Park. Plus, AI-enabled technology is also “giving new life to recordings by artists who are no longer with us,” Kyncl said. “For example, AI has been used to isolate the vocal performance from sound recordings of legendary entertainment Sammy Davis Jr. and renowned opera singer Maria Callas.”
The Warner Music boss also highlighted “one of the first official and professionally AI generated songs featuring a deceased artist,” a duet by Pedro Capmany with his late dad, “the legendary father of Costa Rican rock, Jose Capmany.”
“This is Jose’s first song since 2001, the year of his tragic death,” Kyncl explained. “After analyzing hundreds of hours of interviews, acapellas, recorded songs, and live performances from Jose’s career, every nuance and pattern of his voice was modeled using AI and machine learning.”
Concluded the Warner Music CEO: “With the right framework in place, AI will enable fans to pay their heroes the ultimate compliment through a new level of user-driven content, including new cover versions and mash-ups. AI is unquestionably one of the most transformative forces in human history. Nonetheless, this technology shift is more familiar terrain than first meets the eye. Like many technologies before, it presents massive opportunities for human creativity and innovation.”
