Robert Kyncl: And I guess I’ll take the TikTok one. So, yes, as you said, obviously, I don’t know the details of their dispute. What I can tell you is, I have a pretty unique experience in this. Obviously, I haven’t been on the other side, and having gone through these types of disputes where we have — where content has come down. And so, I know exactly what both [indiscernible] are feeling. I’ve gone through all of those feelings multiple times. And it is not great for either side, obviously, because I think everybody wants to consummate a deal. Whatever you read in the press, don’t believe it, because you don’t know the definitions of any of the words that are there and that is where all the disputes begin. And the thing that I can tell you is that I know both really well and I’m confident that they will at some point find an agreement, because from the YouTube experience, music is incredibly helpful to virality of content, right?
People when they’re creating content, they love trends, they love music. That’s what helps it significantly, makes it better if they soundtrack it. So obviously, that’s valuable to a platform. And conversely, TikTok, YouTube, Reels, all of those platforms are obviously helpful to making music popular. We all love that on the music side. And user engagement is great. I spoke about it in my opening, that this is also what makes music great and different from all other forms of media. So there are mutual benefits here and it’s just about what is the right fair value exchange. And sometimes you have to go through the price discovery [indiscernible] and that’s okay too, because people find out exactly what it is and what it means to them. Obviously, I have an interest in them working it out.
I want them to work it out. And I think they’re both reasonable people that will find a compromise. But as far as our deal, I’m always very confident in the deals that we do. We don’t follow other companies. We don’t do carbon copies of other deals. We do our own, which is why we did the one last year. Again, I’ve had sort of unique experience from both sides to bridge our dissonance. It wasn’t easy with TikTok. I think it was very difficult, too. But we got there. And for us, it was fair. But it was a year ago. It was also a different time. So I don’t know what is driving Universal’s positions. But there’s any way we can help them, we will, all of us. And I’m confident they’ll sort it out.
Bryan Castellani: And Michael, just to add, I mean, Robert said we’re obviously wishing for a collaborative resolution there. But TikTok, as you see our ad-supported revenue growth at 10% in a quarter, TikTok and the deal we executed last quarter certainly contributed to that. So we like our TikTok deal and it continues to be a driver of growth.
Michael Morris: Thank you, Rob. Appreciate it.
Operator: Thank you. One moment for questions. Our next question comes from Benjamin Black with Deutsche Bank. You may proceed.
Benjamin Black: Great. Good morning. Thanks for taking my question. So, Robert, could you give us an update on some sort of your thoughts around, perhaps, or maybe the discussion you’re having with some of your larger DSPs and their respective moves to more of an artist-centric model? It sounds like you’re optimistic for some incremental positive change in near to medium terms, so it’d be great to hear your thoughts on that. And then secondly, on the publishing side of the business, it just continues to outperform. So I’d be curious if you could unpack what’s going on there from operational standpoint and how sustainable or durable are the current trends there? Thank you very much.
Robert Kyncl: Thank you. So, on the DSPs, so our discussions are in early stages, because we first had to develop our frameworks and how we think about the world developing from here. This is one of the reasons also I brought Carletta Higginson into the company. She’s a very strong innovator of deal structures, both across publishing and recorded music and doing so in a very collaborative manner, but she knows how to drive significant change. And so, we’ve been we’ve been developing this strategy and started to talk to DSPs about it. There are multiple different ways to look at it. Once there are options that provide zero disruption to users and there are some that provide mild ones, and then there are some that provide more radical ones.
And the work that we need to do is figure out how we explore them across the spectrum. And what is the best way to roll it out and how to do it in a way that continues to drive growth. Subscribers, more and more people in the [indiscernible] experience, but at the same time optimizes it. And – so none of this should be interpreted as we want to increase pricing dramatically, but then slow down the growth at the same time which is what happened to some other companies. That is not it. Again, I have an experience from the other side to drive growth and I want to maintain that. So I think being thoughtful about what also drives the DSPs is really, really important and that is how we get there. So that’s one. So I joined business plans together with them to reach higher levels of growth for both of us.
On the publishing side, publishing is an incredible business. It’s like — when you see it from the [indiscernible] outside, when you see it from the inside, it’s truly an incredible business and it’s really — it’s — obviously there’s the creative component of it, which we do incredibly well. But there’s also the administration component of it, which is very tedious, very operational, very scaled and it’s finding pennies all around the world and every couch around the world. It’s the biggest thing you have to do. And that is also where we can deploy technology to do it better, with higher return, and more skill. And I think Guy and Carianne are dividing their duties incredibly well, an excellent team, leading Warner Chappell, and they’ve been very, very operational for a long time.
So the results are showing up based on that. So I’m confident in their continued performance.
Benjamin Black: Great. Thank you. Very helpful.
Operator: Thank you. One moment for questions. Our next question comes from Rich Greenfield with LightShed Partners. You may proceed.
Rich Greenfield: Hi, thanks for taking the question. Robert, part of the TikTok dispute, seems like it’s focused around AI. And essentially not — there’s obviously the obvious problem of third-party AI content from outside of things like TikTok being put onto TikTok. But part of this dispute seems to be TikTok actually creating tools and enabling the creation of AI music that would count sort of as part of how they value or decide who gets what payments. And I’m just curious, as you think about your relationship with TikTok, could you just give us your view on sort of how you’re dealing with them on AI music and sort of that broader of like, how Warner gets paid relative to the creation of AI music within their platform, if that makes sense?
Robert Kyncl: So I would actually expand your question a little bit because the issue is not just TikTok. It’s TikTok, YouTube, Meta…
Rich Greenfield: Totally fair, totally fair.
Robert Kyncl: Yes, Correct. It’s a — you’re asking question that is obviously — it’s very relevant across all of the platforms, because the reason — I can’t recall which quarter it was, but I basically, at some point I spoke about my prioritization of partners for AI, starting with the platforms. Then the secondary focus would be the generative AI engines, and the third is governments and regulation in that order, because the platforms not only have the GenAI engines, but they are really the place where the content ends up. Like those platforms that I mentioned is where no matter what the engine is, the people will want the views, streams, that’s where it’s going to end up. So our work is focused on making sure that the rules of the road on those platforms respects copyright.
