The music industry of 2024 is in a very different state of health than it was a decade ago: global recorded music trade revenues in 2014 were less than half the size that they are today, according to IFPI data.
But what do the next ten years of the global music business hold for the industry? And how can its biggest players ensure they’re in a position to make the most of it?
Earlier today (January 8), Warner Music Group CEO, Robert Kyncl, outlined his plans for WMG to do just that – in an internal note sent to the company’s global team.
Within the memo, obtained by MBW, Kyncl highlighted three key areas that he said WMG will focus on in 2024, including growing engagement with music; increasing the value of music, and, evolving how WMG’s employees work together.
“As we start the new year, one thing I’d like us all to remember is that our world has fundamentally changed,” Kyncl told WMG’s workforce.
He added: “The music business is in a very different place than it was ten years ago. Now, we’re in a position of strength. That is the time to get ahead for the future.”
Kyncl, who joined WMG as CEO a year ago, wrote in the new internal note that “Warner’s at its strongest when we embrace the dualities of our business”.
“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.”
Robert Kyncl
He added: “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. We need to make bold, intelligent choices about where we put our expertise, investment, and energy.
“We’re going to fuel the growth of this company using the same resourcefulness and determination with which we develop our artists and songwriters. Because ultimately that’s what will serve them best.”
Later in the memo, Kyncl detailed how each of the three key areas stated above “can help propel” WMG’s growth “for the next 10 years and evolve us ahead of the changing world”.
As part of his plan to “grow the engagement with music,” Kyncl wrote that the strategy will be to “put ‘more wood behind fewer arrows’ in A&R to capture maximum opportunity for as many of our artists and songwriters as possible”.
He added that this A&R plan will include a “geographic focus, based on where artists and songwriters come from and where their streams are going”. Additionally, he wrote that WMG should focus on “genres to bet on in the future”.
Elsewhere, also as part of his plan to “grow the engagement with music,” Kyncl wrote that WMG will “strengthen [the] marketing of artists, songs, and albums into a sustained competitive advantage”.
Kyncl explained further: “This is a deep partnership between A&R, Marketing, Technology, and Business Intelligence to develop best-in-class solutions.
“We ingest, organize, and make useful tremendous amounts of data on songs, users, platforms, etc. – to help artists more consistently succeed and stoke the blue flames of their superfans.”
Kyncl also called for “holistic deep and shallow catalog management” at the company, and highlighted two specific areas of focus for 2024 to “create the most value” for the company’s catalog.
WMG’s CEO said that the company should “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”.
Lastly, as part of his plan to “grow the engagement with music,” Kyncl wrote that there will be an increased focus on “distribution and administration”.
Kyncl explained that WMG is “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”.
He added that WMG is also “building up our scaled publishing administration – which is a highly specialized, resilient and hard-to-copy business”.
As part of his plan to “increase the value of music,” Kyncl also told WMG staff in his memo on Monday that the company needs “to align [its] DSP relationships” to “appropriately value the contribution of our artists, songwriters, and catalogs”.
He highlighted what he said is the need to “stop dilution from millions of low-value and functional tracks” and to “maximize [the] price opportunity for [WMG’s] music”.
Commenting further on the plan to increase the value of music, Kyncl wrote that “we need to develop our direct artist-superfan products and experiences.”
Added Kyncl: “Both artists and superfans want deeper relationships, and it’s an area that’s relatively untapped and under-monetized. The good news is that we already have initiatives in flight against most of these areas, and specific projects with momentum behind them.”
Kyncl closed the memo with a number of thoughts on how WMG employees can “evolve” the way they “work together”.
“Having the right things to focus on is important, but how we work together is equally important,” he wrote.
Kyncl outlined the “skills and behaviors” he said “will make us stronger than others, while making the journey just as fun as the outcomes”.
He also stressed the need for “best-in-class subject matter experts with the scale to support the entire company and talent roster”.
Meanwhile, Kyncl identified the importance of “transparency” amongst the company’s workforce, noting that “free-flowing information about failures and successes is at the core of successful teams striving to improve and learn from each other at all times”.
Plus, encouraging WMG’s global team to “[walk] through walls, rather than [build] them up”, Kyncl explained that “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”. He added: “Having a flexible mind is very important in today’s world.”
Kyncl also underscored the need for employees to focus on “treating each other with respect”, which he said is “not just a moral imperative, it’s essential to an environment of trust and creativity”.
Music Business Worldwide
