Krispy Kreme donuts. That’s it. That’s the brand on Steve Cooper’s résumé that really leaps out and whacks you in the kisser.
Not just because its flagship glossy treats leave even the most health-nutty Angeleno salivating like a Pavlov hound. But because Cooper’s reign as CEO of Krispy Kreme Inc (from 2005 to 2006) sums up how very un-music-industry he was. Until he wasn’t.
Steve Cooper wasn’t even Steve Cooper back then. He was Stephen F. Cooper – described by everyone from Wharton to the Wall Street Journal as a corporate “turnaround guru”. His party trick? Taking hold of distressed businesses, cutting out the root cause of that distress, and making the numbers point in the right direction.
Cooper was so good and so reputed at these salvage jobs, he got the call about one of the all-time worst corporate implosions, Enron, which he resuscitated and solidified as interim CEO from 2002 to 2005. Other restructuring missions included MGM, where he became Vice Chairman in 2009.
And then, in 2011, Warner Music Group came knocking. Stephen F. Cooper was hired as CEO of the WMG in the wake of Len Blavatnik / Access Industries’ $3.3 billion acquisition of the ‘third major’ – during a period of painful and repeated decline for the record business.
The writing seemed on the wall: Cooper would surely take a chainsaw to Warner Music Group, slim down its operations, revoke acquisitive growth plans, kill off frontline labels.
But Stephen F. Cooper didn’t do that. He became Steve Cooper. And he flipped the script.
Within two years of Cooper’s arrival as WMG CEO, with the record industry still in decline, Warner Music Group committed to paying GBP £487 million (around USD $765m) to acquire Parlophone Label Group.
Far from downsizing Warner, Steve Cooper instead bet on music’s growth in all corners of the globe.
This ‘corporate restructuring guru’ didn’t see Warner as a distressed asset – instead he and Len Blavatnik saw it as grossly undervalued. They were emphatically correct.
Over the past decade, Warner Music Group’s annual revenues have more than doubled, up from $2.87 billion in FY 2011 to $5.92 billion in FY 2022.
Meanwhile, WMG’s market value has grown more than five times during Cooper’s reign as CEO – from $3.3 billion in 2011 to $17.1 billion today (even amid a punishing macroeconomic climate for share prices).
Meanwhile, Warner Music Group has outperformed the wider industry: the firm’s global recorded music market share grew from 15.1% in 2011 to 16.7% in 2021, according to Music & Copyright data.
Along the way, Warner has broken superstars such as Ed Sheeran, Lizzo and Dua Lipa, while forging expanded partnerships with artists like Coldplay, Prince, and Madonna.
Little of this would have been possible without Steve Cooper’s belief, from day one, that Warner was an asset to be invested in, and not to be folded down into a shell of its former self.
That mindset of expansion has been epitomized more recently by further WMG acquisitions including 300 Entertainment (US), Qanawat (Middle East), and Africori (Sub Saharan Africa), in addition to nine-figure catalog buyouts with stars like David Bowie and David Guetta. And of course, Cooper led Warner to successfully float on the NASDAQ in the middle of a pandemic, in summer 2020.
Even triumphant corporate leadership stories like these, however, must come to an end.
Here, in Cooper’s last public interview as CEO of WMG, MBW asks him about his biggest achievements in music, the scariest issues he’s had to overcome – and whether the next 10 years of the music business have any chance of being as bright as the previous decade…
Since becoming CEO in 2011, you seemed to have timed a lot of your moves well. now that you’re leaving Warner, does that mean you think the industry’s about to hit a rocky patch?
[Laughs] Absolutely not! And you know that. The next decade will build really positively on the last ten years. There’s so much opportunity on the horizon for our artists and songwriters, and for WMG.
Since 2010, the growth of streaming has been a slow burn towards what we’ve seen over the last couple of years – an explosion of new business models. The uses of music will be unlimited, more interactive, and surround us in our daily lives. Plus, in an increasingly crazy world, music will continue to be a source of solace, hope and entertainment.
All successful companies get to a point where they’d benefit from fresh eyes. I’m so proud of what our team has achieved. It’s a good moment for someone new to come in and keep the ball rolling.
Going right back to the beginning, many people assumed you were a turnaround expert who would restructure the company and move on. Did Sir Len Blavatnik give you a brief when he asked you to become CEO? Can you give me a sense of what’s it been like working with him and why you’ve stayed longer than expected?
Of course, Len wanted someone who was going to look after his investment. But he also set out to create change, lead the pack, and do cool stuff.
We’ve known each other a long time now and we’ll be friends long after I leave Warner. We’ve never disagreed on the big decisions, including our major acquisitions, investments in emerging markets, and calculated risks with tech. He’s involved but not intrusive, is the way I’d put it.
“I stayed at WMG because of that backing from Len, Access, and our Board. I stayed because it’s been a lot of fun.”
I stayed because of that backing from Len, Access, and our Board. I stayed because it’s been a lot of fun. There’ve been some fascinating puzzles to solve. Our artists and songwriters are incredible. I’ve enjoyed working with the team here, who are some of the best human beings I’ve met in any industry.
Over the last decade, has there been a time when you’ve been up at night worrying that it’s all going wrong? What did you do?
There were a lot of anxious moments during those first couple of years. But worrying doesn’t get you anywhere.
People always talk about 2014. The industry dipped below $15 billion for the first time. The lowest ebb. But I remember 2013 as a tougher year. I was only eighteen months in. The industry saw the steepest global drop in revenues since 2008, and we’d just acquired Parlophone, which was most of EMI’s recorded music business in Europe.
“I avoided the kneejerk reaction to radically cut costs.”
I avoided the kneejerk reaction to radically cut costs. It was a huge team effort in balance and belief. We put stress on the backburner and kept investing in our rosters and global footprint.
It’s important to remember, streaming alone didn’t save the music business. There’s no doubt it helped, but we were the ones that kept the lights on through the dark times, and made sure music thrived on the other side.
Have you made any mistakes that you thought were damaging but that have turned out to be beneficial?
I like that question. I’ve made plenty of mistakes, but I’m a big believer in not beating yourself up too much. Or getting too high on yourself either.
Business is really an endless stream of problems to solve. And when you solve one problem, it just creates a new set of challenges. You’ve got to enjoy solving problems.
“Business is really an endless stream of problems to solve.”
To give you an answer…it makes me think of the times when good people have wanted to leave Warner, and we’ve not tried to stop them. At the time, some felt it was a mistake to let them leave, but now we have a number of great examples where those people have come back to Warner, and their commitment is stronger than ever.
I believe people should figure out for themselves where they really want to be and what they really want to do.
In 2016, Warner was the first major recorded music company to declare streaming as its largest revenue source. What did you learn from that transition that’s still useful for people to know today?
The conventional wisdom is that streaming’s been great for the industry because it’s recurring revenue at scale. That’s true, but the transition is more fundamental than that.
Streaming has forever changed people’s listening, discovery, and sharing habits. We’re still seeing the implications of that fluidity play out.
“Don’t get seduced by your own version and vision of the future, or you run the risk of losing sight of the ground beneath your feet.”
What I’ve learned is this: you must stay open and pragmatic. No one knows for sure where this is all going. So don’t get seduced by your own version and vision of the future, or you run the risk of losing sight of the ground beneath your feet.
Work forward from wherever you are today. That’s also easier than trying to change the past [laughs].
There have been times when you’ve been more willing to be openly combative with tech companies than other music CEOs, especially around subjects like streaming ARPU. Do you feel that’s helped long-term?
Yes. Most of the significant streaming companies, by themselves, dwarf the entire music business. Isn’t it important that they know we can be stubborn when it matters? We’re a company with a mind of its own, and a willingness to rock the boat to do what’s right for our artists and songwriters.
We’ve also very deliberately built a reputation as the first stop for anyone who wants to do something innovative in music. We were often first to do deals with the social media companies. It’s fair to say, we’ve led the way in Web 3.0.
“Technology should work on behalf of music, not the other way around.”
WMG brings together many different cultures and identities – Atlantic, Warner Records, Warner Chappell, ADA and so on. But we also believe in the power of moving as one company. And we want to do our fair share…more than our fair share…to get the value of music recognized.
Technology should work on behalf of music, not the other way around.
As you said, you’ve been very active when it comes to Web 3.0. It’s something that’s come up many times on Warner’s earnings calls. How real is that promise?
It’s clearly early days. The music business has always been driven by fandom. Web 3.0 is a very real opportunity to bring together artists and fans in a totally direct and very dynamic relationship, arguably for the first time.
We’re being very thoughtful about built our expertise, relationships, and investments. Our expectation is, when the first big wave comes, we’ll be the ones surfing on top of it.
Warner has also been a pioneer in terms of opening up new and emerging markets. What has a more global perspective taught you?
Do you know Extraordinary Attorney Woo? It’s one of my favorite shows. South Korean TV is the best in the world right now.
I’m fortunate to have become friends with Miky Lee, at the Korean company CJ ENM, which was behind ‘Parasite’ and a treasure trove of other IP.
“As global tastes become more domestic, we’ve systematically been building our local expertise.”
She and I have talked about how it’s a good thing that streaming has democratized access to the arts and cultures around the globe. But what it hasn’t done, and never will, is democratize talent. Genuine voices are as rare as ever, and unless they have the proper backing of a global team, the noise can drown them out.
As global tastes become more domestic, we’ve systematically been building our local expertise. We have an amazing network of teams all over the world, and a brilliant diverse generation of leadership coming through in Latin America, Africa, Asia, India, UK, Europe, all over the world. It’s very exciting.
Speaking of which, during your tenure, almost every senior leadership position has changed. Atlantic, under Julie Greenwald and Craig Kallman, has been a constant though. What has your relationship been like with them? I’m assuming it wasn’t easy when Lyor Cohen left…
They’re phenomenal. When you look at Atlantic’s consistency of hits, their track record of artist development, and the powerhouse they’ve built over the last 15 years, Julie and Craig are running the No. 1 record label in the world.
In the early days, Julie and I got into it quite a bit. But it was always a healthy debate between two people that wanted to get to the best solution. I have tremendous respect for how hard she fights every day for Atlantic’s artists, and how much she cares about her people. I was delighted to see her recognized for the incredible job she’s done when she was promoted [to CEO of Atlantic Music Group, in October].
At the very top, Warner is different from the other two majors. Rob and Lucian came up through record labels, but you were an outsider. For the last 5 years you’ve partnered with Max Lousada, as well as more recently Guy Moot and Carianne Marshall on the publishing side. How has that different formation affected Warner’s trajectory?
As Dirty Harry once said, “A man’s got to know his limitations.” We’ve handed the creative leaders accountability for the creative decisions. Corporate has set some strategy, and provided the financial framework, but we’ve never questioned the creative decisions around the signing of an artist or songwriter.
Max leads by example. He cares passionately about the music, the artists, the team, and he’s one of the most enterprising, hardest-working people in the industry.
“As Dirty Harry once said, ‘A man’s got to know his limitations.’
Guy and Carianne are doing a phenomenal job, and they’ve had a massive impact…creatively, commercially, culturally on publishing.
I want to shout out our great behind-the-scenes teams at Corporate here too. The differences in our structure have meant that our resources work harder and smarter. That’s helped to strengthen our value propositions for our artists, our songwriters and our colleagues. At the same time, no single personality dominates the conversations – this creates a one world, one company, one team mentality.
Warner’s decision to go for an IPO in 2020 was a milestone moment for the industry. But has it changed the way you run the company day-to-day? And how much do you focus on your share price?
Don’t forget that when Access bought the company in 2011, we committed to ongoing transparency and public reporting. For nine years, we held quarterly earnings calls when we didn’t have to. We’ve benefitted from that clarity being baked in.
The share price is a bit like ratings for a TV show. For a start, there are plenty of factors outside of your control. And if you make choices solely based on what might boost the ratings for a single episode, you’ll likely ruin what makes the show great overall.
The share price is important, but it only reinforces that you must do what’s right for the long-term health of the company. If we do our jobs well, the share price will follow. Judge us on the year, not the quarter. I could even say judge us on the decade, not the year.
What are the missed opportunities during your tenure as CEO? What’s the one thing you’ve not got done that you wish you had?
I would have liked to experiment more with direct-to-consumer business models.
Also, in the live music space, the price varies depending on who you’re seeing and what your experience is. I think the recorded music space needs to be more like that. Ever since we had 99 cent downloads, there’s been a tendency for music to be priced the same. And we all know that all music isn’t equal.
I also hoped to do more to improve the intricate web of rights and collections societies. As an industry, we’ve got make licensing simpler and more global.
All of us working in music like to tell ourselves it’s special, like no other industry on earth. But you’ve worked in everything from Enron to Krispy Kreme. Is music really all that different?
It’s two words: Music… Business. That’s a challenging juxtaposition but it’s also what makes it so interesting.
The music bit is unlike anything else. It’s not about products, it’s about human beings. Emotional storytelling that changes lives, all through the vehicle of sound.
“Music is unlike anything else… Emotional storytelling that changes lives, all through the vehicle of sound.”
But the business bit is subject to the same mathematical laws as all other industries. There shouldn’t be much mystique to that part.
Artists and songwriters, and the companies that back them, all deserve to be properly compensated for the value they create. Period.
Which are the artists you’ve most enjoyed meeting?
Ah, I don’t want to single out any artists or songwriters. I do have some really fun, happy memories – whether that’s one of Tom [Corson] and Aaron [Bay-Schuck]’s first signings [at Warner Records], or my recent visit to our new Madrid office. It’s always amazing to meet such talented people as they take the global stage for the first time.
“I saw this job as about empowering our creative leaders – so they in turn could support our artists and songwriters.”
I saw this job as about empowering our creative leaders – so they in turn could support our artists and songwriters. I’ve focused on making our team the best it can be and equipping us with the best tools and resources. Collectively, we want the strongest partnerships with, and services for, the creative community.
I’m assuming you knew Robert Kyncl before but have spent a lot more time with him recently. Why do you think he’s a good choice? How will the month-long overlap with Robert work?
Robert’s skillset is at the intersection of technology, creativity, and business. Often, people who are very strong in even two of those areas make for valuable execs. But Robert’s going to be a triple threat.
He’s always been formidable in negotiations. Now, he’s on this side of the table, and he’s a huge music fan.
We’ve had some great discussions and the transition is going to be super straightforward. I’m in charge until the end of the year, when Robert will take over. I’ll be around for January, so we can talk things through as he gets fully up to speed.
What’s your own plan for the future?
I can’t sit still for long. I’ll keep active and stay engaged. But I’ll have more flexibility to enjoy all the things that I want to pursue, because I won’t be running a global media company.
I plan to make some investments. I’m going to contribute to some boards for non-public companies. I’m going to ski and golf. There’ll be more time for family and friends.
Last question: Any words of wisdom for people just starting out in the music business?
It’s all about teamwork. You’ve got spend more time listening than talking. Practice putting yourself in other people’s shoes. Build your empathy muscle.
You can boil all of this down to four words: Communication. Collaboration. Cooperation. Coordination. That’s what defines a really creative culture.Music Business Worldwide