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Warner Music head Robert Kyncl, who attended the Amplify Music Investment Summit remotely. Photo Credit: Mike Shaw\/Amplify Music Investment Summit<\/p>\n<\/div>\n
Music Is the music industry leaving value on the table and setting itself back by failing to embrace generative AI? Warner Music head Robert Kyncl believes so, and he\u2019s doubling down on the position as his company leans into its Suno partnership.<\/h2>\n
The Warner Music Group (WMG) CEO elaborated on his AI stance during the Amplify Music Investment Summit in New York. DMN was on hand for the event, which, unsurprisingly in light of its name, delivered in-depth comments from Kyncl (who participated remotely) and WMG global head of strategy Lisa Yang about the major\u2019s catalog-acquisition strategy<\/a>.<\/p>\n However, the commercial opportunities and pitfalls of AI were also a key focus during the relevant sit down, which CNBC\u2019s Jon Fortt moderated. Many are well aware of Warner Music\u2019s comparative openness to generative AI; that the company opted to license Suno, which is still being sued<\/a> by Universal Music and Sony Music, more or less sums things up.<\/p>\n Similarly, it\u2019s not a secret that the former YouTube chief business officer Kyncl is an advocate of inking AI partnerships in general \u2013 provided IP protections are in place, compensation is on the table, and individual professionals can decide whether to participate.<\/p>\n Kyncl used those terms when offering his take on the parallels between the music world\u2019s response to the advent of the internet (as well as piracy) and now AI.<\/p>\n \u201cMy point, and I\u2019ve said this publicly multiple times, is that the industry had reacted far too slowly at that time,\u201d Kyncl communicated. \u201cIt was on its heels, defensive, and because of that, it took really until 2014 for the streaming services to really take off \u2013 for a company like Warner getting to breakeven.<\/p>\n \u201cThere was just a lot of value destruction basically for well over a decade. And it was just caused by very defensive behavior and slow movement forward,\u201d he continued.<\/p>\n Put differently, does generative AI have the potential to unlock massive revenue growth? More importantly, will it do so in practice without leaving actual musicians behind? Time will tell \u2013 especially given ongoing legal battles against artificial intelligence giants and the conspicuous absence of Spotify\u2019s much-anticipated AI products.<\/p>\n But at present, reservations of the walled-garden proponents Universal Music and Sony Music aside, Kyncl remains adamant that if harnessed, the unprecedented technology can act as \u201can incredible value creation opportunity.\u201d<\/p>\n \u201cI cannot stress more what an incredible value creation opportunity AI is for us,\u201d he said. \u201cI can\u2019t imagine another one. It\u2019s just, it\u2019s very transformative. So we have to do it right. We cannot wait the way the industry did 25 years ago, and we\u2019ve got to chart the path and grab this tiger by the tail.\u201d<\/p>\n<\/section><\/div>\nNot as frequently discussed: The possibility that the industry\u2019s \u201cvery defensive behavior\u201d in the early AI era could be delaying the inevitable and fueling \u201cvalue destruction.\u201d<\/strong><\/h4>\n
Of course, the subsequent rise of streaming and the subscription-based revenue model is common knowledge, and many know that catalog works (as opposed to new releases) now account for a substantial portion of on-demand listening.<\/h4>\n