#TheWeeklyRoundUp - 10.02.23

Tiktok, indie tracks, ai, and tech-driven ‘efficiencies’: Robert Kyncl’s first earnings call at wmg wasn’t short on punchiness (Music Business Worldwide)

Robert Kyncl could have asked for a rosier set of fiscal results to accompany his first quarterly earnings call as Warner Music Group CEO.

WMG’s investors would be hard-pressed, however, to ask for an address that was more candid and unequivocal.

Example: Within 50 seconds of his opening speech, Kyncl told analysts: “I am committed to maintaining straightforward and consistent communication within the investor community. So in that spirit, I want to immediately and clearly acknowledge that this was a tough quarter.”

Obviously, Kyncl had due cause for this acknowledgment: WMG’s recorded music streaming revenues fell 2.6% YoY at constant currency in the three months to end of December 2022 (calendar Q4, but fiscal Q1 at WMG).

For a major music company so used to reporting streaming growth to its investors over the past decade, that one stung. Yet there was some important mitigation: the equivalent quarter in the prior year (calendar Q4 2021) included an extra week of consumption.

When adjusted for this extra week, WMG’s recorded streaming revenue actually grew 5% YoY in calendar Q4 2022, according to Warner’s CFO, Eric Levin – with subscription streaming revenue up YoY in the “high single digits”, offset by a “mid-teens” YoY drop in ad-supported streaming revenue.

Indeed, Warner said that it battled a “market-related slowdown in ad-supported revenue” in the quarter, in addition to a comparatively weak release schedule vs. the prior-year quarter.

While refusing to shy away from these bruising facts, Robert Kyncl’s first earnings call at WMG – particularly amid a lively back-and-forth with analysts – was overall, forward-looking and positive in tone.

Despite repeatedly clarifying that he’s only been in the job as Warner CEO for five weeks, Kyncl’s address made two things very clear:

1. (i) This is not a mealy-mouthed or evasive leader who is likely to buckle under analyst scrutiny; and

2. (ii) He believes strongly that music can capture much more commercial value in the years ahead.

---

Hero's welcome for Zakes, Nomcebo and Wouter as they arrive from winning a Grammy (DRUM)

It is no ordinary Friday at the OR Tambo International arrivals today. It’s a big day for South Africans as Grammy winners Nomcebo Zikode, Wouter Kellerman and Zakes Bantwini arrived to a hero’s welcome following their recent win. The trio won the Grammy for Best Global Music Performers of 2023 award for their hit song Bayethe.

Addressing the crowd, Nomcebo says it is an honour to be receiving such a warm welcome. “I am happy to inspire young people from the townships and villages to know that it is possible to make it.

“By winning this Grammy, we have already done our part to encourage young people to know to never give up. Also, it is important to put an action to your dreams, don’t just dream, but work towards your dreams. “When you respect your craft, nothing is impossible and remember that drugs are never the way.”

Having previously gone to court about music rights and royalties, Nomcebo urges artists to remember that music is a business.

“We are very safe for this song, but this is not something I want to talk about now. I feel like we are just ruining this beautiful moment,” she tells Drum. “But I don’t want to run away from the fact that it is important for there to be a way for artists still coming up in the industry to be taught that you do not just sing. Music is a business. There are monies available whether from SAMRO or SAMPRA. There are many people who sing and do not know things like that.”

Zakes’ wife, Nandi Madida was also in attendance. Nomcebo’s family came in their number to support her too. Nomcebo’s mother, Buyeleni Mfeka, could not hide her emotions when she saw her daughter walking through the door with her colleagues. She speaks to Drum about the importance of supporting your children, even if you as the parent do not understand what they really want to do.

“I do not know what a Grammy is. All I know is that yinto enzima kakhulu (it is a big deal). I am uneducated, but kids have told me that the award she has won this time is a big deal.”

“I would encourage parents to know that even if your husband has left you or has died, nothing beats supporting your children. Hold your kids close. If you go to bed without food, you have each other.” Zakes describes sports, arts and culture minister Nathi Mthethwa as the most important cabinet member.

“These are the things that can unite us as a country as they not only entertain, but they speak to social cohesion. We need to remember that we can never achieve anything in silos. If anyone thought the arts were a waste of time, they should, from today, understand that we need the arts.” He then urged the minister to “support the arts and give money to the arts”. He feels good that he was mentioned in President Cyril Ramaphosa’s State of the Nation Address.