Warner Music Group‘s CEO of International and Global Commercial Services, Stu Bergen, is one of the worldwide music business’s most prominent execs. Under his charge is growth of Warner artists in territories as far afield as China, Europe, Latin America and Japan.
His company is on a good run: WMG’s international revenues (including UK) were up 6.2% at constant currency in the last quarter of 2015, to $444m. And this year, one of WMG’s international artists, Danish act Lukas Graham, has dominated charts across the globe.
Little wonder, then, that when Bergen gave the below speech at an IFPI event in London yesterday – in the wake of news that the global music industry was up 3.2% in 2015 – he was in optimistic mood, especially for music’s development in emerging markets. Yet, just like his fellow major label execs, he expressed serious concern over certain digital platforms perpetuating a culture of free music without handing over due rewards to artists and labels…
One of the most striking features of our industry’s recovery is its global nature. The largest growth came in markets as diverse as China, Argentina and Sweden.
Technology and digital deal making have opened markets previously rife with piracy as well as emerging economies like Russia, China and Brazil.
This growth means we can invest more in local artists as well as develop our international stars. The stronger we are locally, the more powerful we are on behalf of our global artists. The more global stars we break, the more momentum there is for domestic signings. It’s a virtuous circle.
With the growth of streaming, we’ve seen a meaningful change in the artist development process. Social sharing of music is now being actively encouraged for the first time; we’re seeing geographic boundaries dissolve and artists breaking around the world with unprecedented speed.
“I predict we’ll see far more diversity of nationalities on the mainstream charts in the coming years.”
Take Lukas Graham and their single “7 Years” for instance. It is an extraordinary song by a special artist – one of those great moments in our business. What is different is the pace at which the band’s career has taken off around the world.
Last autumn, “7 Years” was a hit in their native Denmark. It had reached Spotify’s Global Top 30 by the end of 2015. And come February, it was climbing the Billboard 100 in the U.S., where it’s now no.2. Here in the UK, it became longest-running No.1 single by a Danish artist in the history of the charts.
Lukas may be unique but he isn’t a one-off. Look at Robin Schulz, the biggest star to come out of Germany in decades, who topped the global Shazam chart last year. I predict we’ll see far more diversity of nationalities on the mainstream charts in coming years.
With that in mind, we believe that every emerging market offers an opportunity if we can deliver the right mix of investment and artist development. For instance, China is one of the most exciting markets right now for recorded music. At the moment it has modest value, but has the potential to join Japan and South Korea as a top ten market in the next few years.
Warner saw the possibilities in China and bought Gold Typhoon – with its significant roster of local artists. We signed a licensing deal with Tencent – the largest media company in the country – to help distribute our repertoire to the new generation of digital services.
“The core of what we do… is not about counting streams, but fostering an environment that allows artists to become the stadium stars of tomorrow.”
In March, one of our Scandinavian pop stars, Christopher, performed at Tencent’s QQ Awards, in advance of his Chinese tour. Once European artists talked of “breaking America”, now they also dream of “breaking China”.
While much has changed in our industry, the core of what we do remains the same. We discover, nurture and promote great artists.
It is not about counting streams, but fostering an environment that allows artists to deepen their relationship with their audience and become the stadium stars of tomorrow.
Take the incredibly talented twenty one pilots for instance – we have mobilized our entire organization behind them and are committed to their global success.
But no matter how gifted the artist, making their dreams come true requires significant investment.
And in order to sustain that investment, we need to do better at monetizing music. And we need a fair legal environment to help us do that.
“To sustain our investment, we need to do better at monetizing music. And we need a fair legal environment to help us do that.”
We’re reporting meaningful growth for the first time in almost twenty years.
That’s due, in part, to the fact we’ve become digital experts. We’ve already partnered with a huge range of services worldwide, and we’re always exploring what’s next.
But the value of music is still not being fully recognized. Today, there is a real spirit of optimism across our industry, but we are a long way from declaring “mission accomplished”.Music Business Worldwide
