Sony's Rob Stringer on the State of the Music Industry

Well, I try to tell the truth mostly, you know, that would be helpful. I mean, they kind of know because it's such a constant dialogue. But I mean, you know, we've had five years of consecutive growth from streaming, we've had 10 years of consecutive growth from the company. But the challenges are always what's next. I mean, we are at a crossroads at the moment. We have AI, which I'm sure you're going to talk to me about, and we have other challenges of just constantly looking how the business moves on. But you know, we're not a new company, we've been around a while, so we've weathered plenty of storms in the past, and whatever comes hitting our way next, I think we'll probably figure it out.

Um, well, I think the threat is that the disruption from the next chapter of tech causes something that happens that doesn't, to my mind, benefit the art. I mean, my view, where my background, where I come from, was art first, business and tech involved in that second. So if I look at the next chapter, I care about what happens with the art. The tech, I mean, I've been through, I've been at the company a long time, I've been through plenty of different chapters of technological innovation, whether it be cassettes or CDs or downloads or streaming or whatever. So I look at it and say, how is it going to affect the art and how is our positioning going to be? Because at the end of the day, I look after a 125-year-old company really, and to my mind it's like a modern art museum. We have amazing paintings from the past in there, and I'm always looking to put brand new paintings, things in there from future geniuses. So therefore, I'm always concerned with that. Sometimes the tech bothers me more, and some it bothers me less.

Well, I mean, I would have an unusual position on that because in 2000, post-Napster, generally everybody wrote off the recorded music industry, including the investment community. And I didn't mind that chapter because then I got left alone. And actually, I think out of that period we started to create better art because the pressure wasn't on from the technology to be the most powerful chapter. And then iTunes came in, and iTunes, to Apple's credit, did have a boutique taste mentality about the store, which meant that I think they understood. I can tell you from that period that the artists that came through were of a very high quality because it was encouraged to be boutique. Now ironically, this chapter has made us more money times five than the iTunes chapter and the post-Napster chapter. But an algorithm tells you what you want, not what you might like. And there's a difference between what you want because everyone always wants something until they get tired. You might like chocolate chip ice cream until you eat five tubs of it, and then you don't necessarily like it anymore. But with streaming, the downside is you have incredible penetration, and we have hundreds of millions of people around the world, and so that has been very lucrative as a business. But I also miss the sort of the [ __ ] it up algorithm where you learn about something that you didn't know about, right? Instead of getting fed more of what you already, more of the same. And I think that what you didn't know about and you learn about, certainly when I was, I consider myself, and I think probably the reason I'm here and came to America at a time post-Napster when the industry felt like it was in bad shape, was because musically, growing up with the BBC, they played everything. So I wasn't an R&B guy or a pop guy or an alternative guy or a hip-hop guy. I listened to everything because the BBC had a government mandate to play you every type of music. So I was kind of open to that experience. Whereas I think the disadvantage with automated taste is that you end up, as you said, being funneled the same music. And there is no reason why when you're 14 and you love pop music, that when you're 18 you won't love folk music, or if you're 16 and you love emo music. I was at dinner with someone Tuesday where he and I are of different generations, but we both grew up loving hip-hop, and we both agreed that most hip-hop right now sucks.

Well, the first album was where he wanted to go and where we talked about him wanting to go, and it was very clear-cut as where he wanted to go. And actually, as it happens, the first album's now done great, right? So in retrospect, as with many proper artists, you go backwards and you say actually it was all planned. But the first album was a step to go left, not go down the middle, not go right, not more pop, not down the middle and make it easy, and go left. And we went left, and that set us up to go back into the center a little bit on the second record. And then the third record was just completely natural and literally the easiest record, one of the easiest records I've ever met, because he had total vision and the experience of the previous two records. So it's always a journey. Artist always a journey. And you don't necessarily think you have to start in the most commercial place to end up being a really super important artist.

Well, we held passport control when I started. I started in 1985, and it was, you know, we controlled manufacturing, we controlled distribution, we controlled radio. You know, we had the, we were passport control for artists. So we had a lot more power. And I think probably in the pioneer days of the music industry, we abused that power and we probably got a lot wrong, but it was pioneering. And now the artists have at the very least equal power to us, if not more power to us, because we're part of an overall picture. There's live, merch, branding, you know, there's a lot of streams now of the music business that are super lucrative, and we're one strand. And I've been very comfortable with that. I wanted to be the artist partner. I never wanted to be a cigar smoking fat cat, particularly. You know, I know it's always cliche. We were talking the other day, it's like, you know, Mike Myers in Bohemian Rhapsody is fantastic, but he, you know, there's a bit of a cliche about who we are, and you have to kind of work hard not to be that cliche, really.

It's pretty multi-dimensional. I mean, we have a different path to my two friends and competitors. But because I work for Sony, the synergy at Sony is multi-dimensional. I mean, you know, we've had meetings with all our heads of entertainment companies for two days, and the conversations are about PlayStation, anime, movies, television, electronics. So at the end of the day, we've always had that. So I actually think that we were first in all those ideas because we have a lot of strands. You know, we're making movies with our picture company, we're doing games with our PlayStation company, and anime, which is obviously one of the biggest growth brands in the world. We're doing tons of stuff with anime now that I wouldn't have necessarily thought five years ago. So I think it was organic for our company because we were part of a bigger company in itself. I mean, we are part of a bigger corporation. My counterparts at Warner Music and Universal aren't. We are. So it was in the bloodstream to some degree. And actually, we've concentrated on that much more in the last few years. But we have multitude of different revenue streams, and probably 60 to 80 different multi-revenue streams now. So we're pretty dimensional. And I assume the biggest one is still putting out new music.

No, it's not the same because when we are a public company, but when we're talked about on the same terms, it's as much about PlayStation or electronics or Sony television. So no, I mean, yes, I mean, I would want to be doing that not particularly, you know, doing quarterly earnings. I mean, you know, I'm sure you're aware, Lucas, because it's your job, you're aware of the number of press releases we put out compared to our competitors. Considerably less. We frustrate people. We don't even put press releases about the things we do, which I know sometimes is a little bit annoying. So we can talk about that next. We can sign huge catalogues and we don't tell anybody officially because, you know, it's not quite the same dynamic. And would I want to be in that position? Um, no, not really. I mean, I think it's tough. And I'm friendly with people in the other companies. I've worked with the head of Universal and I've known him for nearly 35 years, you know. So it's a tough gig. And you know, of the wider entertainment business, how tough it is to be literally reporting back to shareholders and investors right every three months. Yeah, you know, and you do have to talk your company up, right? I have, I'm fortunate that, you know, I do investor analysis meetings twice a year and I contribute to the Sony Qs, but I'm left a little bit more, I think, to be behind the curtain. When you're doing my job, it's not a terrible thing. The artists are in front of the curtain, the talent is in front of the curtain, and I think being behind the curtain is sometimes better.

Well, using the modern art concept, I think this music is priceless. And we bought name and likeness on two of those acts, so we own all the logos, merchandising, experiential potential, you know, event potential. There is no price as far as I'm concerned for being Floyd. There's no price. What price can you put on, what price is a Picasso? You know, it's relative. And interestingly, which has backed up that process, is that Spotify now, as it hits maturity in particularly the English language markets, the audience of Spotify is older now by design because Spotify is now 10 years old and the audience is getting older. And so if you look at the dynamics of the marketplace, it means that the percentage of people listening to older music is much higher. And so, you know, I think it's a foregone conclusion to be honest. We have relationships with every one of the ones you mentioned. We've had recording and Michael songwriting, we had the recordings for 50 years. Pink Floyd has been signed to in America for 50 years. Bruce Springsteen has been signed his whole career for 50 years. We took the publishing of another company with Springsteen, we took the records of another company with Queen. With Pink Floyd, we had the records in North America, we didn't buy the publishing. And, you know, we bought Bob Dylan's recorded rights as well, you know. So they all had a relationship, right? So Universal did the publishing and you did the records because Dylan released a lot through Columbia, right? Historically, yeah. Well, Dylan's been on Columbia apart from one record in the 70s with which David Geffen took. But we, um, and so we have obviously a lot of numbers, we have a lot of artistic understanding, we have a lot of expertise on the structure of those artist careers. So they felt like good fits. And quite frankly, I didn't want any of those artists to go anywhere else. Bruce Springsteen has been on Columbia his whole career, was not going to leave. It would be like, sorry, in the museum saying there's the Basquiat, it's someone else's now. That wasn't going to happen. So at the end of the day, you know, but they, we think they're lucrative. We think that as we move into incredible eras of digital exploitation, we think Dark Side of the Moon or Thriller or Bohemian Rhapsody or Born to Run are going to be experientially very exciting for generations even well beyond, certainly beyond your generation, well beyond my generation. Your generation is going to see those in different guises for the next 100 years.

We're getting paid for it differently. And I think that, and obviously people are discovering catalog on all the platforms, whether it be Snapchat, Instagram, or TikTok, or Spotify. So, you know, people are discovering that. I mean, you know that the chart is random with catalog because we've got records in the chart from 30 years ago, 20 years ago. I mean literally when I say in the chart, in the top 50 on Spotify from four different decades. So yeah, because people blame catalog, there's this whole narrative in the music business the last few years I feel like that it's impossible to break new artists and part of it is that catalog is crowding them out. No, I think it goes back to my original point, you know, that I think sometimes you need to have something coming up underground and not being overexposed quickly. And I think social media does expose things very quickly, not always for the best purposes. When I was a kid growing up, you could look at rooms around jazz of music, and in that room would be 28 people, and 15 of those people would end up being painters, sculptors, musicians, filmmakers. And those rooms are tough to make now because someone's filming those rooms automatically. And one of my friends in a band who were very big in the 80s from a movement once said to me, I think everyone was said then in social media, we were [ __ ] and so they wouldn't like us and we would have never been successful because people would have judged us on the first hour we ever stood on a stage in front of a bunch of people who were tastemakers who went on to be very successful. So I think that, you know, I think that again, I think tech blows it up and it's great when you're being blown up for that minute. Is it great five years on? Who knows, right?

Um, I think the debate on that would be, did we start off with TikTok on the right note and did we allow them to become what they think they are, which is a promotional platform? And we possibly did. They are not a promotional platform. They are a hugely profitable corporation. And we allowed them to be MTV, and we shouldn't have done that. And now we're backpedaling from there. But the truth is, we should get paid more by several of our DSP partners. And that's part of my job, to make sure that we're paid, and in turn the artist gets paid.

Oh, I mean, I had lunch with Daniel Ek in the summer in Stockholm. I mean, I constantly say to him, and I think obviously they've done a spectacular job of building a business around music, so I would not be critical of what they've done. But I think it should have been going up a dollar a year for the last five years. I think it should probably be much more akin to the Netflix pricing, because Netflix pricing is not based on the entire catalog of content for television and film, and Spotify has every piece of music you could ever want, right? So from that point of view, yes, I think Spotify should be more. But you know, they're making ground on it now, and they want it to be competitive and get their share price up. And so they didn't put the price up, we obviously wouldn't agree with that, but we are where we are, and they're finally putting the prices up, and that's great.

You know, it's like, I mean, I can talk to everybody individually about AI. I mean, we're in a position where it is going to be super important to our business. I hope it's most importantly going to be exciting and make new creative vision and be fantastic in that. For the meantime, I'm sorting out the rights model, and my team and I are supporting the rights model, making sure that we get paid for whatever the training models are and whatever comes out of AI. But do I think it's going to be an exciting tool in the future for making great music? Yeah, I think there's a 14-year-old in the bedroom somewhere who's about to make amazing music using the tools of AI. But we have to get the business model sorted out first.

I think that we're waiting for the artist to come. I'm not going to use that phrase, but we're going to wait for the artist to experiment, and then we'll follow the artists. When we know that experimentation is absolutely exciting creatively, then we will follow them.

That would be really bad for me because then some other artist is going to say you never mention me, and I'm really diplomatic. I know I usually have a rule against these questions. I figure this is promotion. We have a thousand. I'm not going to. But every label boss, every, I know this, I'm talking to you guys, all make a list of like these are the five biggest priorities for this. But I can tell you, you know, for well, that we have a huge independent distribution arm as well, and we have a lot of artists. And the mythology that we're signing less artists is not true. We have more. Okay, I'll give you something that my head of Latin told me the other day, which is because we have a very big Latin division. We have Bad Bunny and Rauw Alejandro and Shakira and Peso Pluma and all these artists. And he told me, here's a musical tip: the next blend coming from Latin America, which is a huge musical movement right now, is reggaeton mixed with tropical music. And artists are starting to blend, and it's coming out of, to some degree, Argentinian, Colombian tropical music blended with reggaeton is going to be hugely popular.