Warner is preparing to actively monetize AI

1. Warner is preparing to actively monetize AI

Warner Music CEO Robert Kyncl has stated bluntly:

the company intends to profit from artificial intelligence, not fight it.

Strategy:

• License catalogs to AI companies

• Create new AI-based products

• Generate revenue from generative music

In other words, the industry is moving from lawsuits against AI → to partnerships with AI.

2. Streaming is entering a new phase of monetization

Previously, industry growth was driven by:

subscriber growth.

Now the strategy is changing:

subscription price increases + new financial terms with platforms.

Warner is renegotiating contracts with DSPs:

DSP = Spotify / Apple Music / Amazon / YouTube.

Revenue should grow not only from the number of users, but also from the subscription price.

3. Music still accounts for a small share of spending

An interesting figure from Goldman Sachs:

The average American spends:

• $69 per month on video streaming

• $14 on music

Warner's conclusion:

music is under-monetized.

Their goal is to increase the user's share of the wallet.

This is a very important signal for the industry.

Essentially, major labels have made three decisions:

1. AI is inevitable

therefore, it's better to license catalogs to AI models.

2. Streaming must become more expensive

Spotify's $9.99 model is considered too cheap.

3. Catalogs are becoming the main asset:

the value of music IP is growing.