Warner Music Group has laid out a comprehensive strategy to expand music’s value, arguing the sector is better positioned than film and television to weather current media industry turbulence.
Warner Music Group has laid out a comprehensive strategy to expand music’s value, arguing the sector is better positioned than film and television to weather current media industry turbulence.
In a letter to shareholders accompanying recent financial results, WMG CEO Robert Kyncl addressed the company’s position and future opportunities.
“We’re just a few months into 2026, and with our foundation as strong as ever, we’re seeing new growth vectors emerge constantly,” Kyncl wrote.
“Demand is booming for hits new and old and music companies now generate more predictable, recurring revenue streams than at any time in history. With algorithmic personalization fueling interest in artists from all eras, new listeners of all ages are exploring historic catalogs and embedding clips into short-form videos. Best of all, there’s plenty of room for even more growth, especially as AI begins to enable fans to more deeply interact with the music they love, by reimagining it rather than just listening.”
Kyncl noted the evolution of the company’s economic model since its public listing. “When we went public in 2020, our economic model was based on consumption. Today, it is based on consumption and creation, opening up a new set of partners, opportunities, and revenue streams.”
In remarks accompanying recent financial results, WMG leadership noted that while Hollywood faces challenges from cord cutting and competition for attention, music maintains structural advantages. Global on demand audio streams reached a record 5.1 trillion in 2025, a more than five fold increase from 950 billion in 2017.
Music consumption patterns have shifted over the past decade. In 2024, 27 percent of US streaming consumption came from new releases, compared to 45 percent ten years ago. This means music companies no longer rely as heavily on the success of new releases, with catalog now driving the majority of streams.
Music is embedded across entertainment formats, from short form social video to major motion pictures and live sporting events.
This integration creates consistent demand that leadership argues distinguishes music from film and television, where aggregate distribution and average revenue per user have largely maxed out through the coexistence of traditional and new media over two decades.
Despite reaching more than 800 million total music streaming subscribers globally, average annual spend per user was approximately $40 last year.
Goldman Sachs research projects the number of paying streaming subscribers will nearly double to 1.5 billion by 2035, with global recorded music industry revenue forecast to reach $55 billion by 2035, up from $30 billion in 2024.
The recorded music industry is currently around 35 percent above its 1999 peak, driven primarily by more people paying for music, though on average they are paying less per person. Streaming services only began increasing prices in 2022 after more than a decade of stasis.
WMG identified main levers to increase music’s value.
DSP price increases in recent years have not shown evidence of spiking churn. The average American spent $14 per month on recorded music last year between streaming subscriptions and purchases, compared to $69 per month on on demand video streaming subscriptions, according to Goldman Sachs research.
In China, Tencent Music added approximately 16 million net new subscribers on average in both 2023 and 2024, in line with growth in the previous three years. Tencent Music’s average revenue per user rose 16 percent in 2023 and 8 percent in 2024.
WMG also highlighted its artist centric approach to dividing the royalty pool, which has been established with DSP partners and will continue to evolve.
The current streaming model charges each user the same flat fee independent of engagement level. Total annual revenue the recorded music industry earns per capita, adjusted for inflation, is currently $51, compared to $95 in 1999 at the peak of the CD era.
Twenty percent of US music listeners are considered superfans and spend two times more than average listeners. WMG is collaborating with DSP partners to develop offerings for these users, including early access to new music and interactive features.
A significant portion of music publishing rights are licensed to DSPs through local collecting societies, resulting in less than free market licenses and fees retained by collecting societies.
The situation is most acute in the US, where ASCAP and BMI remain subject to consent decrees entered into in 1941 that prohibit selective withdrawal of digital rights.
WMG stated it is actively pursuing commercial strategies to increase the portion of its music publishing rights that are directly licensed.
WMG outlined three strategic priorities following a period of internal restructuring that flattened the global organization, brought in new leadership, overhauled tech infrastructure, and cleaned up data systems.
In the first quarter, WMG grew US streaming market share by one percentage point and market share on Spotify’s Top 200 jumped over three percentage points fiscal year to date.
WMG artists and songwriters landed four of the top five spots on IFPI’s Global Singles Chart of 2025, and WMG songwriters contributed to half of the top 10 most streamed songs in the US in 2025.
Catalog performance remains strong through an always on marketing philosophy and sync placements driving increased engagement for artists including Prince, David Bowie, and Fleetwood Mac.
Through a joint venture with Bain, WMG expects to pursue margin accretive catalog acquisitions starting in 2026.
Recently renegotiated DSP deals are shifting the industry from volume driven growth to volume and price driven growth.
WMG has reached new wholesale terms with partners that better reflect music’s value while providing greater economic certainty and untethering from where partners choose to set subscription prices.
The artist centric approach to monetization has been rolled out with most DSP partners. While programs remain in early stages, there is evidence they positively impact aligning economics with the most popular content.
Reorganization, technology investments, and a financial transformation program have enabled accelerated growth while cutting costs. WMG increased Adjusted OIBDA margin by 380 basis points over the last five years. Since 2022, revenue per employee increased 28 percent and Adjusted OIBDA per employee increased 42 percent.
WMG leadership acknowledged concerns about AI generated music but reached a different conclusion than industry skeptics. Deezer has reported more than 60,000 AI tracks are uploaded to its platform daily, and seven million tracks are generated per day on Suno alone.
WMG argued that AI does not replace human artistry but amplifies the importance of artists as familiar cultural icons in a noisy environment. The company stated that in a world of near infinite sound, what becomes scarce is trust in trusted artists, trusted brands, trusted rights, and trusted marketplaces.
The company outlined several approaches to AI. These include protecting value by ensuring AI models respect copyright, artist consent when likeness is implicated, and attribution.
WMG has engaged with policymakers on the NO FAKES Act and the EU AI Act. The company is creating monetization frameworks where AI becomes a licensed additive layer to music.
It is embracing an attribution based system rather than a pure market share based system. WMG has reached deals with Suno, Udio, Stability AI, and Klay based on variable economics enabling growth as partners grow.
WMG noted that the more interactive the medium, the higher the average revenue per user. Fans spend about 25 cents per hour listening to recorded music and 50 cents per hour consuming video, but spend $5 per hour when gaming.
Suno has attracted 2 million subscribers paying $12.50 per month to create music, in addition to paying for listening subscriptions.
The company stated it is raising the bar for platforms to ensure provenance, transparency, and accountability separate trusted artistry from background noise.
Every major distributor should be able to recognize copyright and name, image, likeness, and voice rights, respect permissions, and apportion revenue accordingly.
