This week in Ibiza, Spain, the International Music Summit (IMS) dance music conference hosted a rare keynote interview with Max Lousada, the CEO of Recorded Music at Warner Music Group.
During his appearance at the event, where he was interviewed by legendary DJ Pete Tong, Lousada reflected on his career in the music industry, and his own history with dance music.
Speaking broadly about working in music, Lousada told the audience that the “excitement of watching an artist grow, and a [fan]base grow and music grow, I never get tired of that.”
He added: “That journey of seeing artists experiencing everything for the first time: If you’re in it, it is really, really good.”
Lousada also offered insight into WMG’s dance music strategy. In recent years, part of that strategy has included the acquisition of prominent Netherlands-born dance music company Spinnin Records in a nine-figure deal in 2017.
As noted by Lousada during the keynote, Spinnin just passed the milestone of 30 million subscribers on its YouTube channel.
WMG’s broader dance music strategy also included the acquisition, in June 2021, of the entire recordings catalog of French DJ/producer superstar David Guetta for over $100 million.
WMG also signed a deal with Guetta for future recordings. According to WMG, Guetta was the most-streamed dance artist in 2021, 2022 and so far in 2023.
His track I’m Good with Bebe Rexha, released last summer, has racked up over 1.6 billion streams across all platforms, and over 908 million on Spotify alone, where it also achieved No.1 position on the Spotify Global chart.
Another dance hit from Warner last summer was Oliver Tree and Robin Schulz’s Miss You (Atlantic) which has been streamed over 500 million times across all platforms, and landed in the Top 10 on the Spotify global chart.
Beyond David Guetta and Robin Schulz, Warner works with global superstars like Tiesto and Skrillex, and stars in their home markets like Ofenbach in France and Joel Corry in the UK, as well as rising stars such as Fred Again and Eliza Rose.
Meanwhile, other recent moves from WMG in the dance music business include Warner Records‘ launch in the US, in March of this year, of what it called “its first-ever flagship electronic dance music label” in Major Recordings, led by Sam Mobarek.
In March 2022, meanwhile, veteran dance music executive Patrick Moxey launched a new label group and signed a “global strategic alliance” with Warner Recorded Music for two key record labels Payday Records and Helix Records. Moxey’s Ultra Music Publishing also agreed an alliance with Warner Chappell Music last year.
Plus, in 2021, Warner Music Asia launched a Pan-Asian dance label called Whet Records.
Lousada’s keynote at IMS, and Warner Music Group’s growing footprint in the dance music space, arrive alongside growth in the wider electronic music sector.
According to the new IMS Business Report 2023, authored by MIDiA Research’s Mark Mulligan and launched this week at IMS, the global dance music business is estimated to have grown 34% YoY to reach $11.3 billion in value in 2022.
MBW listened in to Max Lousada’s conversation with Pete Tong. Here are five things that stood out:
Traditional investors didn’t “understand the value” of Spinnin Records, which gave WMG “the edge” to acquire the company
Commenting on why Warner Music Group acquired Spinnin Records back in 2017, Lousada explained during the keynote that, “Warner has a history of independent labels. It’s Atlantic, it’s Warner, it’s Elektra, it’s Sire, it’s Big Beat, it’s Road Runner, it’s now 300, it’s now Spinnin”.
He added: “I felt very comfortable that we could allow their independence and their entrepreneurial spirit.
“And I also believed, and I still do, and probably the research you saw earlier, is dance and electronic music as a genre as a subset I still feel is undervalued.
“And I also felt from an investment point of view, whilst there was competition, traditional investors normally go for AAA acts they understand and I was like, they don’t understand the value of what Spinnin is.
“And that gave me an edge, and it gave us, gave Warner an edge to actually acquire the company.”
Lousada doesn’t think there’s a place for “generalists” in A&R anymore
Commenting on his views around modern A&R in music, Lousada explained: “For me, it’s about being [a] specialist as an A&R – being very immersed in the culture completely.
He added “I don’t think there’s a place for generalists anymore. I think you have to be completely authentic, passionate and clear about your proposition, your value, and their talent. And then you need to look at it in the round.
“Artists have so much choice so you really need to be very clear about what you can deliver for them in order to create a relationship and create a deal.
“I don’t think there’s a place for generalists anymore. I think you have to be completely authentic, passionate and clear about your proposition, your value, and their talent.”
Commenting further on A&R and specifically on the use of data around A&R decisions, Lousada said: “Just what is the defining brilliance of that artist? Is it production? Is it work ethic? Is it a vocal? Is it melody? Is it a lyricist? Is it performance?
“Trying to find something that truly differentiates them in the market, is something that certainly I would always look for. I think being really clear about trying to get the right data with the right context.
He added: “You know, I always use the analogy to some of the younger A&R’s, you can look at a sold-out Pacha or Brixton Academy or El Rey and feel like that has a certain value. But if you’re not in the room and you can’t see the audience singing the song or jump how high they’re jumping – that is a critical part of knowing whether they are growing or whether that was the last Brixton show they’ll ever do.
“And I think we have to make sure the social engagement alongside the streaming data alongside TikTok creates [and reflects] all of that. We’re going into the next horizon of being able to evaluate.”
Consumers don’t subscribe to music services “to listen to music that [they] have no idea of what it is”.
Commenting on the challenges of breaking and promoting artists in the streaming and social media age, Lousada said that “Now, it’s about a demand curve and creating scarcity when there is no scarcity”.
He added: “That is some of the philosophical things we’re trying to tackle, how do we create demand, how do we create moments, how do we create memories of purchase.
“I’m probably older than most of the people in this room but I have memories of when I bought my first A Tribe Called Quest record, when I first heard Goldie drop his record at the Blue Note, I have all of these distinct memories that create loyalty and repeat listenership.
“You don’t subscribe to a service to say, ‘I’m subscribed to this service to listen to music that I have no idea of what it is’. You go, ‘I’m going to do it because I love this artist and that artist.’
“Our job is to keep on making sure that those artists and those experiences are talking back to each other.”
“Technology is going to be one of Warner’s big differentiators in the coming years.”
Commenting further on growth in the digital landscape, and the use of technology in the music business, he said: “We all can see that streaming is a great foundation, but where we can have real growth is about adding different opportunities”.
He added: “AI is a different opportunity, direct to consumer, community management, all of those different components, different horizons, different innovative approaches to how we get music out is going to obviously be part of our growth strategy.
Commenting specifically on Warner’s investment in technology, he explained that, “the art of what’s possible [with tech] is really what Robert [Kyncl, Warner Music Group CEO], is showing us and the executives that he’s bringing in order to execute and invest behind are of the caliber we would have never got without him”.
Added Lousada: “The way we look at and read our records is going to get better. The way we look at our fans and how we can kind of put them into places that we can really talk to them with the use and the enablement of technology is going to be one of Warner’s big differentiators in the coming years.”
“The first way we think about [AI] is how do we protect our artists?”
Lousada also touched on one of the biggest talking points in the modern music business today: artificial intelligence.
He said that, in his view, “The first way we think about [AI] is how do we protect our artists?”
He added: “If we’ve got machines that are learning from our copyrights or we’ve got people using deep fakes and name and likeness, there’s a lot there to unpack.
“We’ve got to figure that out. We need to get it right. I said it earlier, creativity in tech is what wins.
“And I think, the best creatives engaging with AI will probably make the most compelling collision of music, but it’s a fascinating thing that’s unraveling.”Music Business Worldwide