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Warner Music Chief Robert Kyncl Lays Out Plans for Next 10 Years

Warner Music Chief Robert Kyncl Lays Out Plans for Next 10 Years

As streaming has returned the music industry to health over the past decade, with year after year of growth, people have not wanted to admit that, since the pandemic, that growth has slowed down significantly. While we saw double-digit revenue increases for several years in the latter half of the 2010s, the average number of subscriptions through the first six months of 2023 grew just 6% to 95.8 million , compared with a growth of 10% to 90 million for the first half of 2022, according to the RIAA.

To that end, Warner Music CEO Robert Kyncl sent an internal memo to the company this morning, laying out his plans for 2024, excerpts from which appear below. While the points are very general — growing engagement, increasing music’s value via royalty changes and increases in streaming subscription prices, and evolving the company’s internal practices — in practice they show a broader plan to continue the industry’s growth without expecting it to come in the same ways as before.

“Throughout the last year, I spent a lot of time with the leadership team – getting under the hood of the company to see how everything works and planning our next steps,” he wrote. “We’re showing that WMG can be the best of both worlds: Music and Technology, Global and Local, Scale and Speed, Data and Instinct, Individual Talent and Collective Impact…Today and Tomorrow. That’s why I’m calling 2024 “The Year of the Next 10” – the year when we move at velocity to set ourselves up for a winning decade in the new world.

He continued, “We should invest increasingly in the following three areas that can help propel our growth for the next 10 years and evolve us ahead of the changing world.” Excerpts from his letter follow:

Grow the ENGAGEMENT with music:

A. Put “more wood behind fewer arrows” in A&R to capture maximum opportunity for as many of our artists and songwriters as possible: Geographic focus, based on where artists and songwriters come from and where their streams are going.

B. Strengthen MARKETING of artists, songs, and albums into a sustained competitive advantage: This is a deep partnership between A&R, Marketing, Technology, and Business Intelligence to develop best-in-class solutions.

C. Holistic deep and shallow CATALOG management. In order to create the most value, we must: Selectively lean into the marketing of our catalog in the ways we do with frontline; and increase focus on optimizing every title on DSPs, as that is where the majority of catalog consumption and revenue is.

D. Expand DISTRIBUTION and ADMINISTRATION: We are building scaled and highly effective distribution infrastructure so that we can radically and efficiently grow the large “middle class” of artists while our frontline labels can remain focused on artists with the highest potential. We’re also building up our scaled publishing administration – which is a highly specialized, resilient and hard-to-copy business.

Increase the VALUE of music

A. We need to align our DSP relationships so that we appropriately value the contribution of our artists, songwriters, and catalogs; stop dilution from millions of low-value and functional tracks; maximize price opportunity for our music.

B. We need to develop our direct artist-superfan products and experiences. Both artists and superfans want deeper relationships, and it’s an area that’s relatively untapped and under-monetized.

He concludes by saying, “The business is always changing, and the music is changing even faster, so if we want to lead, we can’t let conventional constraints slow us down. Having a flexible mind is very important in today’s world.”

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