HIGHLIGHTS: Robert Kyncl - CEO of Warner Music Group

0:00Hi, everybody. Tune in to this short version of the podcast, which we do every Friday. For the long version, tune in on Wednesdays. Hi everybody and welcome to In Good Company. I'm Nikolaj Tangen, the CEO of the Norwegian So-and-Wealth Fund. And today I'm in really good company with Robert Künsel, the CEO of Warner Music Group, one of the world's largest record labels. Now they have incredible artists including my favorite Coldplay, Ed Sheeran, Dua Lipa and even the Norwegian legends, Aha! Very good. Robert, what a pleasure to have you on. Same here. Thank you so much. Now we need to kind of kick off with your beginning.

0:36You were born in Czechia and so how does your background shape you as the leader you are today? So actually, you know, when I was born and grew up it was Czechoslovakia, the country rebranded three times in my lifetime. It tells you something about change that I'm probably used to. But the way it shaped me was interesting. My parents, my mom was a teacher, my dad was a doctor, you know, in a socialist, communist society not earning much. But the values they instilled in my sister and I actually apply in the capitalist world in the United States. For instance, to always value education, because education is something nobody can take away from you.

1:23When you go through something like nationalization in Czechoslovakia, people are used to losing their possessions. But you cannot lose your education. so our parents were really focused on that or you know my dad would say whenever i i was a competitive athlete cross-country skier and whenever i would fail somehow my equipment failed etc my dad would be like oh that's great uh you know nobody's gonna remember the fact that your bindings failed but everybody's going to remember your ranking and uh and it was one of those wake-up calls to me early on that excuses don't really matter because those are forgotten even if they're good ones, and that it's only the results that matter.

2:05I have to say, if you were a really good cross-country disc, you moved to the wrong country. You should have moved to Norway, right? I know, I know. There are a lot of Norwegians who were kicking our butt. Absolutely. But you were also interested in music from early on, right? You played a couple of instruments. Yeah, very much. You know, there's a saying that every Czech is a musician, and there are deep classical music roots in the country. And my sister played a piano. I played cello. and then after playing show for about three years i then played spanish guitar and my teacher actually is wonderful he was a blind teacher who was a skier as well so i was his teacher and i was this guide for skiing and uh and he was teaching me this wonderful uh art and it was a great long relationship and by the way i just reconnected with him about six months ago which was incredible why did you transition into the music industry when you when you have two sort of hockey sticks like this, you know, to big disruptive forces, scaling, it doesn't really get any bigger than that, right?

3:07Netflix or YouTube, it doesn't get any bigger. So you have to actually set your sights on something smaller and more focused. So I chose music because I love music. We spoke about that. I think music has this incredible power of being absolutely ubiquitous. Everybody in the world has some kind of relationship with music. And everybody has a soundtrack to their life. Music is like a timestamp. Basically, you know, there's a bunch of timestamps throughout your life. And, um, you know, I have this favorite saying that art decorates walls, but music decorates time. And I think that's very powerful.

3:44And because of that, music goes through ups and downs in the industry, but it's resilient and gets through all the downs. And I think it's incredibly interesting to work in the company, transitioning company from one thing that it that it has been to something new that it that it will be and uh i just find that intellectually stimulating and it's it's fun to work on that it's amazing when you have a reunions and you put on the music you play it at the time i mean why you are just back there you know yeah exactly no but it invokes emotions right that's what happens what's the most important thing you you add here um as a record label and then how does it change during the life cycle of an artist let's just start with the beginning how do you how do you how do you find them and what do you add in the beginning i'll uh i'll give you so so we are one of the companies that actually has a great dna and history and discovering artists very early yeah whether it was uh ed sheeran bruno mars dual lipa cardi b um uh zack bryan you know benson boone etc it could go on so So artist development is very core to what we do.

4:56I sat down with, you know, when I started, every time I ran into an artist, I would ask, you know, they would tell me, oh, you have some amazing people in your company. It's awesome. I was like, yeah, tell me who. And they would give me the names immediately. I just stepped up an email and emailed that person. And so many times they're like mid-level executives. And so I was like, hey, I'd like to meet you. So I would meet with them. So there was this one ANR exec that I met with. and I was asking her the same question. How do you find artists? How do you find somebody that you believe in that you think is going to develop in a superstar?

5:30And she was telling me, I look for their connection with the audience before I even listen to their voice. And I was thinking, oh, it's interesting. How do you do that? You look at the likes online or like how do you discern comments, et cetera? He's like, no, I'm watching the audience. I was like, what do you mean? And like, and the live stream is like, no, I go to the shows. I was like, you know, this is a very young executive, by the way, like, you know, in twenties. And I was like, well, but I thought that's what the older A &R guys were doing. I was like, well, I do that too. I was like, and how does that work?

6:03She's like, well, I watched the audience. And if the audience has an emotional connection to the artist, that is priceless. And it's, and it's, it's amazing. And if it's there, by the way, the connection is either they're, they have misty eyes or crying or they're shrieking or they're laughing and if it's there then we work with them on the art and develop their voice and just like develop the artist skill set and the connection is there and now now we have something that we can really build a long lasting long lasting career on that was like interesting and she's like and you know what's important that if it's a female that that audience is teen girls because they're the earliest adopters you know and Shakira and Beyonce etc right and and if it's boys it's even more important so it's basically you know I just described to you a system that that NR executive has to find artists early and build them into stars music is cheap no it's it's probably the best deal that consumers get in anything.

7:07It's definitely cheaper than X. Like if you think about it, it's cheaper than anything because it's been lagging inflation for a very long time. Why is it so cheap? Because, and I don't mean it as a criticism, it's, you know, the industry post Napster and Kazan and all the file sharing services was obviously on its knees. and then the streaming services came and drove growth. And pricing just remained the same from the time any of those services got established. Nobody has moved price up, despite whatever inflation there may have been. But it was the right choice because that was the time to hunt, hunt for new subscribers, right?

7:50So let's say now the value of music to the consumer is 100. Where does the money end up? So what goes to the artists? What goes to you guys? What goes to streaming? It all depends on who the artist is. There's so many. That's one of the things I learned. There's so many, you know, the company has grown. It's been around for many, many decades. And, you know, there's catalogs and there's new releases, distribution deals. So the spectrum is really, really wide. I mean, just think about it, right? We have deep, deep catalogs from Fleetwood Mac to Joni Mitchell, the Eagles. David Bowie. You've got David Bowie too, right?

8:24historic catalogs, which is just incredible what happened. By the way, my younger daughter, like one of her favorite bands is Fleetwood Mac. She's 22 now. It's been her favorite band since 19. And it's just incredible the power that IP has. Interestingly, one of the guys said, aha, Magnifico Holman, he suggested I asked you about this. So kind of the pedigree artist, right? Yes. Where old songs are becoming new hits for new generations who they don't care when it was made or whatever, right? So on that topic, just what have contributed to this renewed interest? So I have to say, actually, since you're speaking of AHA, you know, I grew up in a communist country, closed borders, no freedom of choice of media or speech.

9:19There was very little imported music. AHA was one of the LPs that I got. I think I had like seven LPs when I was growing up. AHA was one of them. So you know the Sunil West Giants on TV? Yeah. And it's like, you know, it's like, by the way, you know, when I said that art decorates walls and music decorates time, for me, AHA decorated my time. And like, I know exactly where I was, you know, in the 80s in Czechoslovakia and, you know, how it made me feel then. 0 0