Warner Music CEO flags AI and streaming deal updates

The letter comes at a time when shares of both Warner Music Group and Universal Music Group have been trading below previous highs amid concerns over the rise of AI-generated content.

Kyncl emphasised the growing role of music in the broader media landscape. He noted that, according to Goldman Sachs research, “the average American spent $14 a month on recorded music between streaming subscriptions and purchases last year, a sliver of the $69 per month they spend on on-demand video streaming subscriptions. There’s clearly more share of the wallet left for music.”

The letter also highlighted that renegotiated DSP agreements are expected to shift the industry from growth driven purely by subscriber volume to a combination of volume and pricing. Kyncl explained that as subscriber growth moderates in developed markets, “DSPs have started to drive growth through subscription price increases. Given this evolution, we have reached new wholesale terms with our partners that better reflect the ever-increasing value of music, while providing us with greater economic certainty and untethering us from where our partners choose to set subscription prices.”

He added that these changes position Warner Music to leverage its catalogue more effectively, stating: “We’ve transformed as an industry and as a company. Now, we’re ready to revolutionise our superpower, the music, and drive its value to new heights for our artists, songwriters, and shareholders.”

The letter signals Warner Music’s strategy to capitalise on emerging technologies and pricing adjustments in an effort to strengthen its financial performance and maintain competitive positioning in the evolving digital media market.