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Newly minted Warner Music CEO Robert Kyncl and his wife, psychotherapist Luz Avila Kyncl, have signed on for another five years of scholarship support for select computer science and engineering students at their alma mater, SUNY New Paltz.
The five-year-old Robert Kyncl ’95 and Luz Avila Kyncl ’96 Computer Science & Engineering Scholarship Fund is designed to benefit underrepresented students, especially women and minorities, seeking careers in STEM. Each year, at least six new transfer students or current Hawks will be selected for the scholarship, which offsets tuition costs.
The success of the scholarship has led to the creation of a group of alumni called the Kyncl Scholars.
“State education provided us with great opportunities, both professionally and personally, and we want to help more students access those same benefits,” said the Kyncls in a joint statement. “In turn, this talented next generation will help drive change and contribute to a more representative workforce in dynamic industries.”
The Kyncls’ most recent gift also supports the Fund for New Paltz and the AMP/CSTEP (AC²) Program Fund, which provides economic support for a number of traditionally underrepresented students who earn degrees in STEM fields and certain other majors such as Psychology.
SUNY New Paltz is a short drive north of New York City in Ulster County. As the name of the scholarship suggests, Robert graduated in 1995 (International Relations) and Luz a year later (Psychology).
“The Kyncls’ generosity in this area sends an important message to prospective and current students that people in leadership positions believe in their ability to succeed,” said Erica Marks, vice president for development & alumni relations and executive director of the SUNY New Paltz Foundation. “The University is continually evolving to remain competitive in offering high-quality computer science and engineering education that prepares students for their future. Each year, a powerful new cohort of Kyncl Scholars will be equipped with the training to be effective and collaborative contributors in the community.”
Robert Kyncl joined WMG on Jan. 1 after a decade as chief business officer at YouTube and seven years as vp of content acquisitions at Netflix. Read his first interview as CEO here. Luz Kyncl is a longtime licensed psychotherapist, and a certified health coach and mindfulness teacher. She is also the author of Liberate Yourself.
New Warner Music Group CEO Robert Kyncl addressed investors for the first time since taking over the company at the top of the year, acknowledging the “tough quarter” for the major label while also laying out a vision for how he sees the music industry’s present and future.
The company posted revenues of $1.48 billion for the quarter that ended Dec. 31, 2022, down 8% from the same period the year before, which the company noted contained an extra week, skewing comparisons slightly. Growth came from the publishing sector, which saw revenues up 9.2%, or 14.2% in constant currency, while recorded music revenue fell 10.6%, or 5.6% in constant currency, with recorded streaming revenue down an 6.7%, though the company said that streaming revenue was up half a percentage point when adjusted for the extra week, with a lighter release schedule and falling ad-supported streaming revenue the causes.
That led to Kyncl’s acknowledgement that WMG had a tough quarter, noting that, “like most companies, WMG has been dealing with macroeconomic headwinds and the impact of currency exchange rates.” He added that WMG’s release schedule for this year is weighted toward the second half of the year, with releases from Ed Sheeran, Cardi B, David Guetta, Aya Nakamura and Bebe Rexha on the horizon.
Kyncl then spoke about both his decision to join Warner after 12 years at YouTube and seven at Netflix, as well as his vision for growth for the music industry and the effects of artificial intelligence and TikTok on how that future will look, both creatively and monetarily.
“This industry has achieved something rare: It’s built mutually beneficial, long-term partnerships with many of the world’s biggest companies — Amazon, Apple, Google, Meta, Spotify and Tencent among them,” he said. “As successful as music has become, there’s still meaningful upside ahead for three reasons. One, as technology opens up emerging economies, the industry’s addressable market will continue to expand even further. Two, innovation is constantly creating new use cases for music, giving us the opportunity to diversify our revenue sources. Three, music is still undervalued, especially when compared to other forms of entertainment, like video.”
On the last point, Kyncl pointed out that Netflix’s subscription price has roughly doubled since 2011, the year that Spotify debuted in the U.S., while the price of a music subscription has remained largely flat, even though music subscriptions contain access to a wide swath of the world’s available music, whereas video streamers — of which nearly 80% of U.S. households subscribe to three — are segmented.
He also spoke about his vision for WMG’s role in that future, noting that he hired two former YouTube employees in his first five weeks — Tim Matusch as executive vp of strategy and operations, and Ariel Bardin as president of technology — which should “tell you something about our priorities” in the future.
“We will continue to invest in new artists and songwriters, our catalog and our global expansion,” he said. “At the same time, we plan to thoughtfully reallocate some resources to accelerate how we use technology and data to empower artists and songwriters, as well as drive greater efficiency in our business.” That, he added later in the Q&A section of the call, will come “with continued focus on financial discipline and cost containment.”
That doesn’t necessarily mean layoffs, however; he noted that WMG “has actually been much more measured in its headcount growth, for instance, over the last few years than others in the industry who are now undergoing significant layoffs,” and had been addressing financial initiatives even before the recent fluctuations in the market. “But again, I’d like to reiterate that I’ll be focusing on reallocating our internal resources in order to invest in technology and drive not only more tools for our creators, but also greater efficiencies for us,” he added.
On the topic of AI — which he called “probably one of the most transformative things that humanity has ever seen” — Kyncl said that the conversation falls into four buckets in how content owners need to work with AI platforms: “One is the use of existing copyrights to train generative AI. The second is sampling of existing copyrights as the basis for new and remixed AI generated content. The use of AI to help and support creativity — so an assistive way to do that. And most importantly, find ways to protect the craft of artists and songwriters from being diluted or replaced by AI-generated content.”
But he also stressed that the conversation is not just about the future of AI, but about how things can be handled today to prepare for that future — namely, that the processes for identifying and tracking copyrighted material on platforms and making sure they are monetized for the copyright owner need to be better in the present to prepare for what is to come. That’s something Kyncl has plenty of experience with from his time with YouTube, whose ContentID system was overseen by new WMG exec Bardin, and something he says Warner will be focusing on under his purview.
Another benefit from his YouTube days, Kyncl says, is his experience being on the other side of the negotiating table from the major labels when it came to developing YouTube as a partner with and contributor to the music industry. During his tenure, Kyncl helped steer the relationship between YouTube and the labels from one of animosity to one of mutual benefit, which he stressed came from a collaborative approach — one he intends to bring to Warner in its approach to its relationship with TikTok, which is currently in a similar situation to the YouTube of old, in terms of being under fire from the music business for its perceived low payouts and under-valuation of music on its platform. Kyncl described how YouTube’s position changed in answering a question about whether the labels will push for changes with its relationship with TikTok.
“At YouTube, we looked at this problem very closely, and we decided that music was very important to us, and that’s why we did it,” he said, referencing YouTube’s push into subscription streaming, tools like Shorts and improvements to ContentID, among other initiatives. “TikTok needs to do that. It’s the right decision for them to evaluate. And you can see from YouTube’s execution what the results of the finding was for us. But I can’t speak to what TikTok finds. That’s up to them. But my answer is, a holistic relationship is what we’re looking for.”
Warner Music Group’s net revenues fell nearly 8% to $1.48 billion, despite growth in streaming revenues and its music publishing business, as the company suffered from a tough comparison to the year-ago quarter, it reported on Thursday.
WMG reported net profits declined by 34% to $124 million compared to the year ago period when the company reported $188 million in net income. This quarter, which ended Dec. 31, 2022, had one fewer week than the quarter ending Dec. 31, 2021, which resulted in outsized earnings in the year-ago period.
Executives said that beneath those headline figures, the company saw a 9% growth in music publishing revenue, 13.2% in music publishing streaming revenue and 11% increase in operating income.
“The foundations of this company are strong, and our addressable market is continuously growing,” Warner’s new CEO Robert Kyncl said in a statement. “Music’s value, power, and ubiquity are among the many reasons I decided to join WMG and lead the next phase of our evolution. As we navigate a challenging business environment, we expect to have a strong release schedule in the second half of 2023 while managing our costs throughout.”
The company’s music publishing division contained most of the quarter’s highlights, with revenues up 9.2%, or 14.2% in constant currency, driven by increases in digital and performance revenue. Digital revenue increased by 12%, or 15.5% in constant currency, and streaming revenue increased 13.2%, or 16.8% in constant currency, on growing streaming and timing of new digital deals, the company said. Digital revenue now represents 59.6% of total music publishing revenue, up from 58.1% last year. Performance revenue increased thanks to continued growth from the hospitality industry, concerts and live events, while mechanical revenue was flat. Synchronization revenue declined on lower commercial licensing activity in the U.S.
In the recorded music division, revenue fell 10.6%, or 5.6% in constant currency, on lower digital, physical and artist services and expanded rights revenue. While streaming revenue was down 6.7% in the quarter, when adjusted for the impact of the extra week in 2021, WMG said recorded music’s streaming revenue was up half a percent, impacted by al ighter release schedule and a slowdown in ad-supported revenue due to macroeconomic conditions.
WMG revenue fell 7.8%, or 2.7% in constant currency, compared to the year ago quarter, which had an extra week
Digital revenue decreased 5%, 0.9% in constant currency
Streaming revenue decreased 4%
Music publishing revenue increased 9.2%, or 14.2% in constant currency
Music publishing streaming revenue grew 13.2%, or 16.8% in constant currency
Recorded music streaming revenue decreased 6.7%, or 2.6% in constant currency, on a lighter release schedule impacted by the fewer number of weeks in the quarter
Net income was $124 million this quarter, down 34% from $188 million one year ago
Adjusted net income of $110 million was down 51% from $223 million in the year ago quarter
Warner Music Group’s double-digit fourth quarter revenue growth served as the capstone in chief executive Stephen Cooper‘s long-term growth strategy, and is a signal more growth to come, Cooper said on Tuesday.
YouTube’s former chief business officer, Robert Kyncl, will replace Cooper as WMG’s new CEO on Jan. 1, though Kyncl will share the top duties with Cooper for his first month.
Cooper’s 12-year-tenure at WMG has been marked by an early embrace of digital streaming, major expansion into markets in Asia, the Middle East and Africa, and taking the company public roughly two-and-a-half years ago, among other things.
“I’m very proud of the progress we’ve made over the past 10 years,” Cooper said on a call with analysts Tuesday. “As I look out on the next 10 years, I believe we’re at the doorstep of a new golden age of music. As the ecosystem becomes more complex and exciting new business models emerge, our role as the connective tissue between artists and fans will only become more prominent and important.”
WMG reported quarterly revenues rose 16% at constant currency to $1.5 billion in the fiscal fourth quarter ended Sept. 30, with solid growth across all business lines, including a 39% and a 48% jump in digital and performance revenues respectively. Investors welcomed the news, pushing Warner’s stock up 15.2% to $31.08 as of 10:30 a.m. in New York.
Cooper said he sees the company’s future momentum coming from continued growth in the number and price of streaming subscriptions, penetrating deeper into new emerging markets and investing more in new digital technologies.
WMG now has partnerships with more than 200 streaming services and operates in 70 countries around the world. While executives decline to put a number on how much WMG may make from recent subscription price hikes by Apple Music and Deezer, they said they expect it to result in other streaming companies raising prices.
“I’ve consistently told you that streaming revenue would continue to have significant runway, that we would have price increases and ongoing subscriber growth, and that emerging platforms would continue to expand,” Cooper said. “We’re now seeing all these come to fruition.”
WMG’s annualized revenue from emerging streaming platforms, include deals like the recent one reached with Meta, topped $370 million this quarter, Cooper said.
The fourth quarter saw big releases Lizzo, whose album Special was her first to hit No. 1 on Billboard’s Top Album Sales chart, as well strong carry-over sucess from some of WMG’s superstars like Ed Sheeran, Dua Lipa and Silk Sonic.
The company’s pipeline remains strong, Cooper said, with first quarter releases expected from Paramore, Aya Nakamura, Cardi B, Roddy Ricch and others.
However, Cooper said he expects the outsized monetary impact of hit singles and albums to continue to decrease in the coming years as the company works with talent in more geographic markets and diversifies its revenue streams.
“As we’ve broadened and deepened our artist roster and prioritized a global approach to domestic music, our revenue composition has evolved,” Cooper said. “A decade ago, our top 5 artists generated over 15% of our recorded music physical and digital revenue. In 2022, they generated just over 5%.”
One new geographic market where Cooper said WMG plans to expand is in Eastern Europe. In recent months, WMG invested in the Polish concert and festival promoter BIG Idea, the Serbian record company Mascom Records, and participated in launching OUT OF ORDER, a new label for Eastern European artists.
Warner Music Group, helped by digital revenue growth across recorded music and publishing, reported quarterly revenues rose 16% at constant currency (9% as reported) to $1.5 billion in the fiscal fourth quarter ended Sept. 30, the company announced Tuesday (Nov. 22). Adjusted earnings before interest, taxes, amortization and depreciation (EBITDA) grew by 16% to $276 million.
In his final quarterly earnings after 12 years as Warner Music’s chief executive, Steve Cooper said, “Against the backdrop of a challenging macro environment, we once again proved music’s resilience, with new commercial opportunities emerging all the time. We’re very well positioned for long-term creative success, and continued top and bottom line growth. We’re excited to have Robert Kyncl joining next year as WMG’s new CEO, as we enter the next dynamic phase of our evolution.”
WMG’s share price edged slightly lower in pre-market trading, down 0.88% to $26.98 on Tuesday at 8:19 a.m. New York time. Warner Music executives will discuss the company’s quarterly and full year results on a call with analysts at 8:30 a.m. ET.
Digital revenue grew 12.3% at constant currency or 6.8% as reported to $989 million, including a $38 million settlement related to certain copyright infringement cases. Total streaming revenue increased by 8.9% at constant currency (3.5% as reported) due primarily to driven by music publishing streaming revenue, which rose by 37.0% at constant currency (or 29.8% as reported).
Recorded music streaming revenue increased by 4.7% at constant currency, but decreased by 0.4% as reported. Digital’s share of total revenue comprised 66.1%, compared to 67.3% in the prior-year quarter, due to the double-digit growth of recorded music artist services and expanded-rights and licensing revenue.
Music publishing revenue improved 32.3% at a constant currency (23.9% as reported) to $254 million on the strength of digital and performance revenue. Digital revenues jumped 39.5% at constant currency (32.5% as reported) to $159 million. Streaming revenue increased 37.0% in constant currency (29.8% as reported) helped by streaming services and new digital deals.
In WMG’s recorded music segment, revenues rose 13.1% at constant currency (6.1% as reported) to $1.25 billion. Expanded rights revenue improved 33% to $204 million at constant currency (21.4% as reported) due to an increase in concert promotion revenue following the disruption of the touring business in 2021.
Physical revenue of $123 million was up 6% at constant currency but down 3.1% as reported, primarily due to volatility in exchange rates that offset higher vinyl sales and strong sales in Japan. Digital revenues of $830 million rose 8.1% in constant currency (up 2.9% as reported), and now represents 66.7% of total recorded music revenue compared to 68.9% in the prior-year quarter.
Music publishing contributed nearly 17% of overall company revenues in the quarter, up slightly from the year-ago quarter when music publishing made up 15% of overall revenues. Recorded music revenue contributed 83% of overall revenues in the quarter, down slightly from the year-ago quarter when recorded music revenues comprised 85% of overall company revenues.
Warner Music Group (WMG) is collaborating with NFT marketplace OpenSea to enable select WMG artists to build and extend their fan communities in Web3. Under the partnership, WMG artists will be offered early access to OpenSea’s new drops product along with improved discoverability, personalized storytelling on customized landing pages and OpenSea’s safety and security features. They will also receive dedicated support and best practices from the OpenSea team while enjoying their own dedicated drop pages to host limited-edition projects. The first collection will be a collaboration between Warner Records UK and Web3 company Probably Nothing, which recently launched Probably a Label, a Web3 record label in partnership with Warner Records.
Audius, a decentralized music community and discovery platform for developers, artists and fans, acquired virtual music experience platform SoundStage.fm. Based in Barcelona, SoundStage.fm offers interactive experiences for fans — enabling engagement through dancing and live-reaction based functions — while providing new branding and monetization opportunities for artists. The platform has featured artists including Firebeatz, Kill Paris and ill.Gates.
Independent digital music licensing partners Merlin signed a new partnership with China-based short-form video platform Kuaishou. Under the agreement, Merlin members’ music will be available across Kuaishou products including Kwai and SnackVideo. Kuaishou boasts over 1 billion monthly active users across the globe, according to a press release.
Exceed Talent Capital, a platform that enables people to purchase SEC-compliant shares of talent, partnered with Lil Durk to offer an IPO for his upcoming OTF collaboration release of the song “Bedtime” with his artist Doodie Lo, allowing fans to participate in revenues of royalties from the song. To celebrate the partnership, Lil Durk and Exceed will release the “Trenches All-Access Pass” NFT, enabling exclusive access to the private Grand Theft Auto roleplay server built by Lil Durk and his OTF Gaming company. The Exceed presale will grant immediate lifetime access, limited edition in-game wearables and offer holders first dibs on shares from the music IPO.
Sony Music Entertainment Middle East and Kuwait-based creative studio, music and video production company Ghmza partnered to produce music and promote emerging Khaleeji pop artists across the Middle East. Actor and Arabic pop singer Bader Al Shuaibi and Kuwaiti singer, songwriter and TV personality Bashar al-Shatti will be the first two artists to work with Sony under the new partnership.
FaZe Holdings, parent company of gaming and youth culture platform FaZe Clan, will develop original content, private fan events, exclusive merchandise and more in partnership with Xfinity. Under the deal, Xfinity will become the official internet and mobile provider for FaZe Clan. The two companies will also host The Gig, a series of private music and gaming-crossover events for college students, featuring hip-hop artist and longtime FaZe Clan family member Offset. Fans in attendance will have the opportunity to meet FaZe Clan members, learn about exclusive Xfinity offers for students and more. The first show will take place Nov. 3 at Boston’s MGM Ballroom, followed by a second at the Tabernacle in Atlanta on Nov. 10. The two companies will additionally produce an original series, Rig Raiders Brought to you by Xfinity, featuring FaZe Clan members and special guests delivering game set-ups for underserved creators and communities. Xfinity branding will also be integrated into FaZe Clan’s ongoing programming across all channels and content.
Community-driven, open-source artificial intelligence company Stability AI announced $101 million in funding. The round was led by Coatue, Lightspeed Venture Partners and O’Shaughnessy Ventures LLC. The company will use the funding to accelerate the development of open AI models for image, language, audio, video, 3D and more, for consumer and enterprise use cases worldwide. Stability AI is the company behind Stable Diffusion, a free and open-source text-to-image generator that launched in August. Stability AI’s consumer-facing product DreamStudio boasts over 1 million registered users across more than 50 countries, according to a press release.
Sony Music struck a joint venture with Josh and Sam Fluxgold under the banner Oneway Records to sign and develop artists in Israel. The JV will focus on artists with international appeal. (Variety)
Dim Mak En Fuego — the Latin imprint of Steve Aoki‘s record label Dim Mak — has signed Ecuadorian-Colombian producer and DJ 2DEEP. The co-owner of reggaeton-electronic event Reggaetonlandia, 2DEEP most recently co-produced Natanael Cano and Aoki’s “Nataaoki,” which dropped earlier this year. He’s slated to release his freshman EP next year, his first project under Dim Mak En Fuego. 2DEEP is the first producer/DJ to join the label’s roster, which includes artists such as Andrezka and AquihayAquihay. – Griselda Flores
Melle Brown and ESSEL are among the first signees to Parachute, Virgin Music UK‘s new distribution and artist services arm for dance and electronic artists with crossover appeal. The imprint is inspired by the late ’70s sounds of Casablanca’s Parachute Records. The first unofficial single from Parachute was Brown’s “Feel About You” feat. Annie Mac. It was followed by ESSEL’s “Don’t Walk Away.”
Volumetric capture and immersive content company YOOM, formerly known as Tetavi, raised $15 million from investors including Jimmy Iovine, Finneas O’Connell, SpringHill Company CEO Maverick Carter, Darkroom CEO Justin Lubliner and Main Street Advisors founder, chairman and CEO Paul Wachter. All have signed on as strategic partners, joining the company’s largest existing investors and shareholders including Insight Partners, Marc Rowan and Aaron Stone.
Musician and Web3 artist Daniel Allan signed with CAA for representation. According to the agency, Allan’s NFT music projects have generated over $700,000 and more than 20 million streams worldwide. Like his sophomore EP Overstimulated, his latest EP Glass House was released with the use of NFTs on Sept. 30.
Session and Songwriters of North America (SONA) partnered to make Session’s app, Session Studio, available to all SONA members. Session Stuio allows SONA members to capture song and recording data at the point of creation and deliver it downstream to managers, labels, publishers, CMOs and digital service providers. Members will also have access to Session Studio’s collaboration tools. Exclusive resources will be rolled out to SONA members as part of the collaboration.
American Idol runner-up HunterGirl signed with 19 Recordings/BMG. The singer-songwriter released her debut track on the label, “Hometown Out of Me,” on Friday (Oct. 21).
Oak View Group (OVG) signed an exclusive multi-year arena naming rights agreement with Baltimore-based CFG Bank. Under the deal, OVG’s forthcoming arena in the city will be renamed CFG Bank Arena. The venue is projected to open in February 2023. The agreement includes prominent exterior and interior signage, exclusive benefits to CFG Bank clients, cardholders and employees and the launch of a new community engagement program. Financial terms of the agreement were not disclosed.
The Hives signed with Matt Greer at ATC Management. Greer will co-manage the Swedish five-piece rock band alongside Brian Message and Courtyard Management’s Chris Hufford. The band was previously managed by Cyndy Villano at Do Good Work Management.
Production music company KPM Music launched a Web3 community that will offer music creators the opportunity to purchase digital collectibles entitled KPM Music Genesis Collection, including music from KPM’s “Greensleeves” series. The collectibles will be available exclusively on TuneGO, a Web3 platform operating on the Flow blockchain.
Indie singer VÉRITÉ partnered with Troy Carter and Suzy Ryoo‘s Venice Music. Venice offers tools, services and support on part with major labels while allowing artists to retain ownership and creative autonomy over their work.
J-Pop star Ado signed with Geffen Records. Ado — the voice actor behind the lead character in One Piece Film Red, the 15th film in the blockbuster Japanese franchise — provided vocals for seven songs featured in the film and on its official soundtrack.
Vietnamese/Chinese-American artist Spence Lee, formerly known as Shotta Spence, signed with 88rising in partnership with Mike WiLL Made-It/Ear Drummers Records. He will release his latest single, “On God,” on Friday (Oct. 28).
Turkish rapper and DJ Lil Key signed with Atlantic Records Germany, marking the first time the label has signed an artist from outside Germany.
CD Baby signed an agreement with fan engagement platform Laylo to offer CD Baby users an exclusive discount on Laylo’s Pro tier. Laylo allows artists to notify their fans about new music releases, content, merch and event announcements via text, email and Facebook Messenger.
Nettwerk Records signed Massachusetts-based lo-fi artist and music producer Towerz and Mississippi-based rapper/singer/producer Laeland.