MBW Reacts is a series of analytical commentaries from Music Business Worldwide written in response to major recent entertainment events or news stories. Only MBW+ subscribers have unlimited access to these articles.
Warner Music Group CEO Robert Kyncl used an appearance at Morgan Stanley’s conference this week to make an expansive case for why artificial intelligence represents an opportunity for WMG — and for the music industry at large.
The WMG CEO’s remarks came on the heels of a shareholder letter in which he argued that AI is music’s “next growth engine” rather than a threat to rights holders.
On the broader industry backdrop, Kyncl was bullish about the music industry, calling it “healthy” and “a very attractive category,” pointing to music’s resilience in a world of geopolitical uncertainty and noting that it has not been as well monetized as film and television.
Here are four things we learned from the conversation…
Credit: PhotoGranary02 / Shutterstock.com1. ‘It’s growing at a rapid pace’: Kyncl makes the case for AI music creation platforms, using Suno’s own numbers
WMG reached licensing settlements with both Suno and Udio in November 2025, following lawsuits filed by the RIAA on behalf of the major labels in June 2024, alleging copyright infringement in the training of their AI models. Suno continues to face legal action from Universal Music Group and Sony Music Entertainment.
At Morgan Stanley, Kyncl used Suno’s metrics (reported by the company itself just days before the conference) to make the case that AI music creation platforms represent an incremental revenue opportunity for the industry.
“Today, on Suno according to the last numbers release, you have 2 million subscribers paying $300 million a year, which is $12.50 per month per user, which is more than what people are paying to listen to music,” he said.
“The point is it’s incremental to what is happening in music today, and it’s growing at a rapid pace. So of course, we embrace it. And of course, we want it to succeed. And we obviously welcome the rest of the industry to come on board.”
Kyncl also addressed the structure of WMG’s AI deals, contrasting them with the flat fee arrangements being struck by news publishers. “Today, you see a bunch of news about news organizations doing AI deals, right? And those are done on a flat fee basis. That is not the case with us. With us, it’s precisely the opposite. We’re done all on a variable basis.”
The reason, he said, is straightforward: “With news, the news has a shelf life of 24 hours. Our content has shelf life of 100 years — completely different thing. For us, it’s all about negotiating the outputs and our revenue share on the output so that when our partners are growing, we’re growing. When we’re growing, our artists and shareholders are growing.”
He also said he expects creation-focused offerings to migrate to the major DSPs in the “not-too-distant future.” “I would expect — you should expect — that those offerings will make its way to the DSPs and help grow the business even past what we’re all projecting today.”
Giorgio Trovato via Unsplash2. AI will shift royalties from market share to attribution — and that favours owners of ‘familiar and iconic’ content
Kyncl’s most substantive argument concerned the long-term structural impact of AI on how music royalties are distributed.
The dominant streaming model today divides royalties proportionally based on each rights holder’s share of total streams. Kyncl argued that AI-driven music creation will displace this over time, replacing it with attribution-based royalty pools — where value accrues based on which specific works are used to generate AI outputs.
“In the world where most people create — which is entirely possible — we believe the most content and most inputs used for that will be familiar iconic content,” he said. “And in that world, most value will accrue to that content because of attribution rather than market share distribution. It’s rewarding quality, which is not where we’ve been in a market share-based world.”
He drew on consumer behaviour to support the argument: “When you are uploading a video to Instagram and you want to attach a song, you start typing a name of a song, a name of an artist that is in your head. You’re not necessarily going through the recommendations of unknown artists. And I think there will be a similar behaviour in terms of creating IP.”
Credit: Piotr Swat / Shutterstock.com3. Warner is using AI to automate catalog optimisation, revenue forecasting — and music video quality control
Kyncl devoted significant time to the internal AI tools WMG is building across its operations, describing catalog management as the primary focus — natural, he said, given that Warner manages “well over 1 million songs” on DSPs.
“It is humanly impossible to tend to every single one of those songs and make sure that every single song has all of the metadata fixed correctly, has all the right assets and that it’s optimised for the algorithms of every single platform,” he said. “In an AI world, that is possible and that’s exactly what we’re working on.”
Revenue forecasting is another area where WMG has introduced AI alongside its existing finance team. “Now we can start comparing who’s getting closer and who’s right. It just makes us better at managing our business.”
Perhaps the most concrete example Kyncl offered was an automated music video QA tool. “Today, and to this day, we’ve been doing it using people. Now with AI, it’s 1/10 of the cost, 1/10 of the time, and it’s super fast and high quality.”
He described how the tool, built for catalog, has begun migrating organically to frontline teams — artists delivering a music video two hours before release can now be accommodated in a way that previously wasn’t feasible.
4. Kyncl argues there is a ‘return to scale’ in music — and that labels are more important, not less
Running through Kyncl’s remarks was a direct rebuttal of any argument that AI and democratized distribution diminish the role of major labels.
“There is, in general, and this may be a contrarian view — but I think there’s a return to scale,” he said. “You need the scale of catalog. You need the scale to recruit people on the technical side. You need the scale to recruit people on the business development side. It is very hard to achieve all of these things within a smaller company.”
On the value proposition for artists specifically, Kyncl pointed to the discoverability problem in an era of abundant supply. “We live in a world of unlimited noise and noise that is increasing. So while on the one hand, democratised distribution gives everybody a voice; on the other hand, those voices are being lost in this tremendous noise. If you’re an artist that wants to succeed on a consistent basis, you need a global infrastructure of people and the technology underlying to help you actually achieve that and stay there.”
He also pushed back against the suggestion that WMG’s efficiency drive and headcount reductions had come at the cost of growth. “Everybody was telling me, this is not possible. You’re going to start cutting costs, you’re going to decelerate. And we’ve actually achieved the opposite.”
Kyncl attributed that outcome to a series of compounding changes rather than any single factor. “Talent is definitely one. Measurement is another — we built a lot of different ways to measure our impact and our outcomes, which we didn’t have before. It’s cadence of operations that contributes to that. No silver bullet, but simply said, great management team, combined with a much more strengthened infrastructure and a clear vision for the future on what to do and marching against it as one team.”
