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.
Rob Stringer, the Chairman of Sony Music Group and CEO of Sony Music Entertainment, doesn’t give many public interviews.
For one thing, Stringer – unlike his contemporaries at Universal Music Group and Warner Music Group – isn’t required to face down questions from investment analysts on quarterly earnings calls.
That’s because, unlike UMG and WMG, Sony Music Group isn’t directly publicly traded. Instead it’s an important (and increasingly profitable) subsidiary of the Tokyo-based Sony Corporation, which also plays home to PlayStation, Sony Pictures, and other key divisions.
Stringer gave a rare interview yesterday (October 10), however, to Bloomberg’s Lucas Shaw at the financial publication’s Screentime conference in Los Angeles.
The duo’s wide-ranging conversation covered ground that occupies the minds of music biz types daily.
Topics included Sony’s recent catalog M&A splurge, which has seen it buy rights associated with storied acts including Michael Jackson, Queen, and Pink Floyd.
Stringer also discussed the power balance between artists and labels in the record business, plus the role of TikTok… and how much it pays rightsholders for the use of their music.
You can watch Stringer and Shaw’s discussion below, but we’ve also rounded up four things that particularly stood out from the interview…
Credit: PHLD Luca/Shutterstock
1) Sony Music’s boss confirmed their Pink Floyd, Queen and Michael Jackson deals… and pointed to ‘experiential’ opportunities for heritage acts.
One of the biggest revelations from Stringer’s interview at Bloomberg’s Screentime conference was the confirmation of the company’s recent catalog deals with Pink Floyd, Queen, and the estate of MichaelJackson.
Earlier this month, we reported that Pink Floyd had agreed to sell their recorded music catalog to Sony Music in an agreement worth approximately USD $400 million, according to sources.
The news arrived after Sony reportedly completed the acquisition of a career-spanning set of rights for another legendary band, Queen, for over $1 billion, earlier this year.
The MichaelJackson sale, meanwhile, first reported in February, sees Sony Music acquiring 50% of Jackson’s publishing and recorded masters catalog, while participating in other income streams.
These three deals followed a $150 million-plus deal in 2022 for Bob Dylan’s recorded music catalog and a $500 million-plus deal in 2021 for the masters and publishing rights to Bruce Springsteen’s catalog.
Stringer was asked why Sony has been so active in buying these catalogs and to explain why the reported values of the three most recent deals (which he didn’t confirm) are as high as they are. Stringer said: “Using the modern art concept, I think this music is priceless.”
He added that “there is no price, as far as I’m concerned, for Pink Floyd” and equated the value of the legendary British band’s catalog to a painting by Pablo Picasso.
“What price can you put on … a Picasso?” It’s relative,” he said.
“Using the modern art concept, I think this music is priceless.”
Rob Stringer
Stringer also confirmed that Sony “bought name and likeness on two of those acts”, adding that Sony now owns “all the logos [and] merchandising,” and pointed to the “experiential potential” and “event potential” presented by owning the NIL rights.
Experiential events using the likeness and music of superstar artists is very big business. Just a couple of weeks ago, we learned that the ABBA Voyage virtual experience in London generated over $129 million in 2023.
Legendary rock band KISS recently sold their song catalog, plus name, image and likeness rights — including their face paint designs — to music investment firm Pophouse Entertainment (the company behind ABBA Voyage) and also plan to launch a virtual concert series featuring digital versions of themselves.
Could we see a similar virtual experience for the likes of Queen, Michael Jackson or Pink Floyd? The public’s demand for virtual concerts is certainly there, as evidenced by the 1.1 million visitors to ABBA Voyage last year.
Stringer also offered a bit of insight into why he believes buying catalogs of legacy acts like Pink Floyd are a good investment in the streaming, noting that the audience is getting older on “Spotify now, as it hits maturity, particularly [in] the English language markets”.
“So if you look at the dynamics of the marketplace, it means that the percentage of people listening to older music is much higher. I think it’s a foregone conclusion, to be honest.”
Stringer also pointed out that Sony already had long-running relationships with “every one” of the artists with which the company has struck recent big money catalog deals, including Bruce Springsteen, Pink Floyd, Michael Jackson, Queen and Bob Dylan.
“We have a lot of artistic understanding and we have a lot of expertise on the structure of those artists’ careers,” he said.
“So they felt like a good fit. And quite frankly, I didn’t want any of those artists to go anywhere else.”
Credit: izzuanroslan/Shutterstock
2) The music rights industry allowed TikTok to ‘become MTV’
The music industry’s relationship with TikTok is often harmonious, yet sometimes fractious.
The argument that music has played a key role in TikTok’s growth has led some in the industry to question whether artists, songwriters, and record labels are adequately remunerated for the use of music on its platform.
At the beginning of the year, Universal Music Group pulled its catalog from TikTok, primarily because, in UMG’s words, “TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay”.
But after a three-month licensing stand-off, UMG and TikTok struck what they called “a new multi-dimensional licensing agreement”.
“We allowed them to be MTV and we shouldn’t have done that. And now we’re backpedaling. They are not a promotional platform.”
Rob Stringer
During his interview on Thursday, Stringer was asked if TikTok pays Sony Music enough.
Stringer argued that “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 probably did.”
He added: “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 that.”
TikTok’s not the only service that Stringer says should be paying more to the music industry, however.
He added: “The truth is, we should get paid more by several of our several of our DSP partners. And that’s part of my job. It’s to make sure that we’re paid and then turn the eyes to pay.”
Credit: Shutterstock
3) On… why he’s glad not to run a public music company like Warner Music Group and Universal Music Group
Elsewhere during the interview, Stringer was asked about the differences between Sony and its rivals Warner and Universal and whether those rivals being publicly traded companies benefit Sony because they’re required to make public disclosures, including quarterly reports.
Universal Music listed on the Amsterdam Euronext in October 2021, while Warner Music Group launched its IPO on the NASDAQ in 2020.
Sony Music’s parent company, Tokyo-headquartered Sony Corp, is publicly traded and reports results for its music unit in its quarterly financial reports alongside results for its other divisions, including Gaming and Pictures.
“Would I want to be doing [quarterly earnings],” asked Stringer, in response to the question about his rivals, adding: “Not particularly.”
Added Stringer: “We don’t even put out press releases about the things we do, which I know sometimes is a little bit annoying [for the media].
“We can sign huge catalogs and we don’t tell anybody officially because it’s not quite the same dynamic.
“Would I want to be in that position [of running a publicly-traded music company]? No, not really.”
“To be behind the curtain when you’re doing my job, is not a terrible thing.”
Rob Stringer
Stringer also commented on how “tough” it must be, to be the leader of a publicly traded music company like Universal or Warner.
“I think it’s tough and I’m friendly with people in the other companies,” he said. “I’ve worked with the head of Universal [Sir Lucian Grainge] and I’ve known him for nearly 35 years. It’s a it’s a tough gig, that. It is [tough] to be literally reporting back to shareholders and investors every three months and you have to talk your company up.”
Added Stringer: “I’m fortunate that I do investor analysis meetings twice a year and I contribute to the Sony quarterlies, but I’m left a little bit more.
I think that [being] behind the curtain when you’re doing your job is not a terrible thing. The artists are in front of the curtain. The talent is in front of the curtain. And I think [a music company CEO] being behind the curtain is sometimes better.”
4) The power balance between artists and labels
Stringer also argued that in the era of digital music, “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.”
That “overall picture” includes “live, merch, branding… there’s a lot of streams now of the music business that are super lucrative, and we’re one strand,” Stringer said.
But of course, it wasn’t always this way.
“When I started – I started in 1985 – [labels] controlled manufacturing, controlled distribution. We controlled radio… We were passport control for artists. So we had a lot more power,” Stringer said.
Nonetheless, Stringer says he doesn’t mind that record companies have relinquished their “passport control” credentials.
“I’ve been very comfortable with that,” he said. “I wanted to be the artist partner, I never wanted to be a cigar-smoking fat cat!”Music Business Worldwide
