Warner Music Group expects its licensing deals with artificial intelligence platforms to start boosting its subscription streaming revenue, starting from WMG’s 2027 fiscal year, which begins on October 1, 2026.
That’s according to Warner Music Group CEO Robert Kyncl, who told the company’s fiscal Q3 earnings (calendar Q2) call on Wednesday (August 5) that WMG’s partnerships with AI music firms Suno, Stability AI, KLAY, and Udio would drive the contribution.
Kyncl said WMG expected its “licensing deals to contribute materially to our subscription streaming revenue growth starting in fiscal ’27.”
Kyncl‘s comments came as WMG reported subscription streaming revenue growth of 11% YoY at constant currency in calendar Q2.
Total revenues in the three months to June 30 rose 9% at constant currency to approximately $1.86 billion.
Net income attributable to the company reached approximately $204 million, against a $16 million loss in the prior-year quarter.
WMG reported the results days after CFO and COO Armin Zerza left the company on July 31, in a departure it attributed to “personal reasons.”
Lou Dickler, WMG’s Global Controller and Chief Accounting Officer, was named acting CFO.
Tom Corson, previously Co-Chairman and COO of Warner Records, was promoted to COO of the wider company.
WMG told shareholders earlier this year that it expected its Suno partnership to deliver “material top and bottom line growth” from fiscal 2027.
Dickler echoed that outlook on the call, telling analysts the company had “new licensing deals with AI companies, most notably Suno,” which it expected to “provide nice contribution starting next fiscal year.”
On Suno specifically, Kyncl said the AI music generator remained on track to move to a licensed model later this year. Despite inking an agreement with WMG in November, Suno is yet to launch a generation model fully trained on licensed copyrights.
“The plan… remains exactly as it was, which is for them to transition to a licensed model later this year, and there’s no change in the timing,” Kyncl said.
The Munich Regional Court ruled on July 31 that Suno had infringed copyright by training on compositions from the repertoire of German collecting society GEMA.
Kyncl said that decision “effectively confirmed the Warner Music Group contract and strategy, which has committed Suno to transition to a licensed model.”
Kyncl half-joked that WMG was “very thankful to the court for confirming our strategy.”
“THE MUNICH COURT DECISION LAST WEEK EFFECTIVELY CONFIRMED THE WARNER MUSIC GROUP CONTRACT AND STRATEGY, WHICH HAS COMMITTED SUNO TO TRANSITION TO A LICENSE MODEL.”
ROBERT KYNCL, WARNER MUSIC GROUP
Kyncl likened the music industry’s attitude toward AI licensing to Hollywood‘s reluctance to work with the television industry in the 1950s.
He said the movie studios feared television was “entirely substitutive,” until Walt Disney struck a production deal with ABC to help fund Disneyland.
Through that deal, Kyncl said, Hollywood “uncovered one of the greatest sources of revenue and profits for the entertainment industry, which came from the television industry.”
Kyncl said protecting artists and songwriters remained WMG‘s “top priority” as it struck AI deals.
He said WMG had “expanded the number of deals where fully-gen-AI content must be identified and removed from pro rata share [of royalties].”
Kyncl pointed to Deezer, which he described as the most transparent platform on the issue, saying it receives 90,000 AI-generated track uploads a day, more than half its daily total.
He said streams of those tracks amounted to between 1% and 3% of consumption, with monetization “a fraction of that.”
Kyncl also flagged regulatory wins, saying Australia‘s government had in July ruled out a copyright exemption for AI training.
Warner was the first major to settle its copyright case with Suno, in November 2025, striking a licensing partnership that also saw the AI firm acquire concert-discovery platform Songkick from the company.
So far, WMG is the only major music company to have licensed Suno.
Suno said in the wake of its WMG deal last year that it would launch new licensed models in 2026 and deprecate its current models, with audio downloads restricted to paid accounts.
Suno raised more than $400 million in June at a $5.4 billion valuation, and has said more than 100 million people have used its platform.
Universal Music Group and Sony Music remain in litigation with Suno, while Sony is the only major yet to settle with Udio.Music Business Worldwide
