Warner Music Group CEO Robert Kyncl has revealed that the major is developing a superfan app.
It’s part of WMG's plans to invest savings made from staffing cuts into music and technology to accelerate growth. The job reductions of approximately 10% (around 600 people) will see the major exiting its owned and operated media properties.
Kyncl was speaking at Web Summit, a conference in Doha for business and tech leaders from around the world. He was joined onstage by global star and newly signed Warner Music artist Nora Fatehi to discuss the opportunities in music.
In January, Kyncl unveiled his long-term strategy for Warner, calling 2024 “The Year of The Next 10”. As part of those plans, he said “both artists and super fans want deeper relationships, and it’s an area that is relatively untapped and under monetized.”
Music Week highlighted the focus on superfans in last year’s Goldman Sachs Music In The Air report, which estimates that there is a $4.2 billion market opportunity. Major labels are currently focusing on that income stream, particularly at a time when streaming growth may have peaked in key markets.
"I firmly believe in the power of a superfan,” Kynlc told the Web Summit audience.
While it’s early days for the app, the Warner Music boss is clearly excited about the initiative.
“So something we're working on at Warner are these direct to superfan experiences,” he said. “I've assembled a team of incredible technology talent who are working on an app where artists can connect directly with their superfans, who are generally the people that consume the most and spend the most… and we’re focused on making sure that artists get data on these superfans.”
He added: “Music is omnipresent, it's everywhere. Artists want to work with every single platform… they don't want to optimise just for one platform over another. So a solution like this for superfans has to be a cross-platform solution. We, as a record label, are in a perfect position to do that because we work with all of the platforms. Historically, we haven't had the technology talent to do this, but now we do. It's an exciting piece of work that will launch later this year."
New signing Nora Fatehi responded: “This sounds exciting… sign me up for this one.”
I firmly believe in the power of a superfan
Robert Kyncl
Kyncl also addressed the impact of AI, a subject he’s tackled in previous speeches and on Warner Music earnings calls.
“We’re focused on working with the digital service providers to make sure that they handle content created by AI responsibly,” he said. “Control, attribution and monetisation are at the core of our discussions with them. We also work with the generative AI engines… and we work with governments on regulation that continues to enable AI’s development, but at the same time, protects people's identity and their voice.”
With MENA/North Africa identified as a high-growth region by the IFPI in its previous global report, Kyncl spoke about the major’s ambitions.
"Even from my time before Warner while at YouTube, I saw tremendous opportunity in the region,” he said. “The music market here is growing twice as fast as it is growing globally. And there are tremendous opportunities because currently, it's quite under-monetised from a music subscription standpoint, relative to other parts of the world."
He added: "WMG acquired a company here a couple of years ago, Qanawat, that is doing really well and we're also currently the market leader in music here."
At a time when the industry is evolving and streaming distribution has become more accessible, Warner Music’s CEO also took the opportunity to speak up for the role of the record label.
“When distribution got democratised, everyone can publish,” he said. “And whenever everyone can publish, it's wonderful because everyone has a chance. But it also means there's unlimited and growing noise, which means it's harder to sustain your success. It's harder to grow your success. And when that happens, suddenly the thing that enabled you starts working against you. And so the role that we play is to help turn the tide and help artists break through the clutter on a global scale.”
He added: “We have a global infrastructure... with marketing and promotions teams in many countries. That’s what it takes to create a global star, if you want to do it on a sustained basis. You need to understand the ignition cities or countries… and how demand on the internet grows. We collect all of that data from digital service providers… so we can analyse and see how demand is moving. Then we can tailor our marketing campaigns for an artist based on the genre that they're in and their goals. That’s something only a large music company can do because of the global resources that we have. And I'm excited to keep investing into this expanding global demand for content. And it's not just traffic from America to the rest of the world. It's from everywhere, to everywhere... the global trade routes.”
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