Eric Levin: Ben, this is Eric. I’ll take that. So I think the first thing to note is that we did a restructuring, reduced headcount this year, are getting meaningful savings from that. Our technology investments are really being funded by those savings, not coming out of margin. So that’s the first point. The second point is at the IPO, we had a long-term projection of 100 basis points increase per year on average in margin. We have largely met that. We’re saying we’re going to meet that again in ’23. I will say that as we look forward, we are focused on margin increases. We are working on our ’24 budget now, so I don’t have anything specific to say for ’24. I will say that we actively — Robert, myself, the business team actively worked on a game plan for OIBDA growth and margin improvement within fiscal ’23.
We’re working collectively as a team. Early in the year, I said 50 to 100 basis points was realistic for this year. Now, we’re confirming the high end of that range as our objective, as our goal for the year. And that is largely through active management of the business. Both revenue growth — we saw reaccelerated digital growth in Recorded this year and extraordinary performance in our Publishing division, both with growing margins and active cost management, not just in headcount, but also areas like marketing that allow us to achieve this strong margin growth. So we as a team will continue to look at growth in the business, both top line and margin. Where exactly it will land in ’24, we’ll report in future quarters as we finalize our budget.
But it’s very much in the center of our focus.
Operator: Our next question comes from the line of Michael Morris with Guggenheim Securities.
Michael Morris: I wanted to ask about the TikTok agreement. There’s a lot of complexity in the announcement here. So I’m hoping you can share some additional detail. As you look at the different components of this agreement, Robert, can you help us understand which elements are the most impactful to your business maybe in the near term as compared to which elements need to unfold a bit more over time? So some details there would be great. I’m also curious as to whether this deal sets any precedent for other technology partnerships that you have? And then finally, Eric, you’ve discussed in the past to move on some of these kind of emerging agreements from fixed payment structures into more variable agreements. So does this agreement start to compensate you more on a usage basis, particularly given just the popularity of the platform?
Eric Levin: Sure. Go ahead you start. Go ahead start, Robert.
Robert Kyncl: All right. Eric and I are shuffling with this thing. I won. So obviously, we can’t share much, confidentiality, as I mentioned before. What I can tell you on the elements, obviously, I focused on value for us. And what is important to me is that whether it’s in ad-supported or subscription, that we have fairness across all of our distributors so that nobody feels disadvantaged or advantaged in any way. And that we have a well-distributed distributor set of partners with all sort of feeling equal. And so that was an important tenant of the relationship with me — with TikTok. But what I also wanted to make sure is that we focus on the users, on their users, because that is important to TikTok and any DSP for that matter.
And I think it’s important for music companies to focus on that equally in order to make it win-win. And I have to say that I’m very pleased with the way Shou, the TikTok CEO, has engaged and sought also a win-win deal for both sides. And I want to make sure that this impactful platform drives even more value for us in the future, because we’re delivering the value to them as well. And I think we’ve achieved this between both parties. And — but there’s a lot of work to do for us to unleash even more opportunities, and we have a road map for that.
