Warner Music Group CEO Robert Kyncl recently discussed the relevance of traditional music labels in the current music ecosystem. Kyncl argued that, despite the rise of digital platforms and indie music distribution platforms, labels still play a crucial role in the industry. He compared the situation to the advertising industry, which many thought would be rendered irrelevant with the emergence of Google’s AdWords. However, ad agencies proved to be valuable in helping brands navigate the increasing complexity of advertising, and Kyncl believes the same is true for music labels. He emphasized that labels provide not only support in building an artist’s career, but also in sustaining it once established.
Kyncl also addressed the impact of artificial intelligence (AI) on the music industry. He predicted that the music business will be at the forefront of harnessing the potential of AI, as music is well-aligned with the internet and lends itself to recommendations. However, he acknowledged that AI also poses challenges in terms of copyright infringement. Drawing lessons from YouTube’s Content ID system, which allows copyright owners to monetize their content, Kyncl believes that similar solutions can be applied to AI-generated content. He emphasized the importance of embracing technology and finding ways to give artists choices in navigating the AI landscape.
In addition, Kyncl discussed the resilience of the streaming audio business compared to the streaming video business. While streaming video services have faced challenges such as declining subscriptions and potential consolidation, Kyncl believes that music streaming is more resilient. He highlighted the tremendous growth of the music streaming market over the past 15 years and the opportunities for further expansion in emerging markets. Kyncl sees a bright future for the audio streaming business, with continued growth and increasing GDPs in emerging countries.