Warner Music wants to get ahead of the AI curve - appoints new CTO
“Legislate. Litigate. License”
AI
Warner Music Group (WMG) has saddled up with Udio, an AI music creation service set to launch in 2026 – after settling a copyright and licensing spat.
Under the terms of the agreement the two will let customers use AI to remix Warner-signed artists who have agreed to participate, “while ensuring artists and songwriters are credited and paid,” WMG said on November 19.
That’s the third partnership $16 billion by-market-cap WMG has signed with an AI firm this month: it’s also inked deals with Klay (an AI-augmented music subscription service), and Stability AI (AI toolings for music production.)
CEO: AI is a “defining moment”
WMG CEO Robert Kyncl said on a November 20 earnings call: “We need to acknowledge the reality that generative AI technology has arrived and it is not going away. So we need to be proactive and lean into the future.”
From the invention of the phonograph to today’s streaming, new technologies “over many decades has posed both challenges and opportunities. AI represents another defining moment,” he added.
The CEO said in a November 20 blog post: "History shows, the more interactivity users have with the music they love, the more value is created... This is the moment to shape the business models, set the guardrails, and pioneer the future."
Warner will, he added, "lobby for legislation that sets clear guidelines. We deploy litigation to halt bad actors. And we use licensing as the most powerful way to shape the future…”
AI bands hit charts
The use of AI to generate music and indeed bands has been controversial. (One UK parliamentary group has urged the British government to amend the Consumer Rights Act 2015 to ensure AI-generated music is “labelled.”)
Earlier this month AI-generated song "Walk my Walk" by AI-generated band Breaking Rust hit No. 1 on Billboard's Country Digital Song Sales chart. The AI song also saw three million streams on Spotify in less than a month.
Billboard said on November 14 that “at least six AI or AI-assisted artists have debuted on various Billboard rankings” over the past few months.
Big Bands: Big Lawyers
Warner Music Group owns the rights to the music of Charli XCX, Ed Sheeran, Fleetwood Mac, Led Zeppelin, among other landmark musicians.
When it comes to potentially licensing their music for AI remixes etc., “the partnerships we forge will offer a variety of specific use cases,” said Kyncl.
“Each of them adheres to our principles, winning important protections for artists and songwriters, while ensuring that they share in every dollar that’s earned. And as the services grow their revenue, so will the pay outs.”
The CEO added: “Past lessons teach us that delaying only lets others define our future. The music business learned that during the file-sharing era. And the film & TV industries are still regretting not embracing streaming sooner. So for artists and songwriters to win, the music industry needs to be a leading force in the formative stages of AI, not a passive participant.”
A new CTO
This month WMG appointed a new Chief Technology Officer (CTO), Leho Nigul, to run its technology strategy, team, and product roadmap. Nigul, previously SVP, Engineering, replaces President of Technology Ariel Bardin – who will stay with the company through end-2025 for a smooth handover.
Nigul will report to CEO Kyncl – who described his CTO’s mandate in part to “leverage AI for the benefit of our artists, songwriters, and employees.”
As SVP, Engineering, IBM veteran Nigul “meaningfully upgraded the company’s tech infrastructure and processes,” WMG said this month.
"Stabilised core systems"
“We're in a high-volume business, and it requires infrastructure, solid, strong infrastructure that is scalable,” Kyncl told analysts on the Q4 call.
“So we focused on that. We strengthened our digital supply chain. We sped up our songwriter payments, introduced more transparent accounting.
“In publishing, we stabilized and upgraded our core systems, which would include royalty processing and sync licensing systems. And we're nearly fully live with our financial transformation initiative, which unlocks a whole host of benefits and a better and more insightful P&L, more transparency for artists and songwriters, et cetera.” (WMG is a big SAP Ariba user…)
“So we've really focused a lot on core infrastructure so that we can accelerate the business and handle… [the] deal pipelines that we have; whether it's organic ones or M&A, all of that requires infrastructure.”