The new CEO of Warner Music, Robert Kyncl, has called for music streaming platforms to increase their prices, which he believes is currently undervalued.
Speaking at the Morgan Stanley Technology, Media and Telecom Conference, Kyncl noted music’s worldwide appeal, and its relative lack of monetisation compared to the film and TV industry.
Describing music as “the lowest form of entertainment in terms of monetisation”, he said: “Music has a 100% of the global audience as the addressable audience.
“Everybody in the world listens to music, everybody likes music – it’s different for everybody, but they all do – which is very important because it gives us multiple bites at the apple to figure out our role in the industry, how we contribute and what share we take,” he continued.
“Music is undervalued, and this is not my opinion – there are actually numbers to back it up. If you take the US, the price that the user pays per hour of consumption of music is half of what they pay for movies and TV shows on streaming services.”
Kyncl moved to Warner Music from YouTube in January this year, and he said that he saw Warner’s future as “a technology-enabled music company”.
Some streaming platforms have raised their prices in recent times, with Deezer, Apple Music and Amazon Music upping their costs to consumers in recent times. But perhaps the biggest elephant in the streaming room, Spotify, has steadfastly refused to up its prices, costing consumers the same as in 2011.
The increase in subscription prices and whether or not it directly affects artist income in the short term is a separate topic for discussion, but Warner Music has been taking steps to prioritise artist income for some time now. Last summer, WMG became the first major record label to adopt SoundCloud’s “fan-powered” royalties model, which distributes royalty fees based on how much an individual user listens to a particular artist's music.
Kyncl also spoke about TikTok’s influence on the music industry, as well as the challenges that the platform faces going into the future, seeing similarities with YouTube’s earlier days and its fraught relationship with sectors of the music industry.
“At some point TikTok needs to decide how important music is for their future,” he said. “In YouTube’s case, it was helping people because people like having music to make their videos go viral.