So, I get a lot of questions on it every time, you have massive user engagement, which TikTok has, right? It’s been very successful in creating it. It creates new opportunities, not just for that company that has the consumer, but also for companies that work with it to develop new revenue streams off of this fan engagement. And whether that fan engagement is promotional in nature or economic and e-commerce driven, all of those are the possibilities. And what I wanted to establish is having a strong agreement with TikTok that gives us the license to both go deep together and innovate in the coming years. And that’s what we’re doing. So we’re — I can’t really share any more details on that. But other than I’m very pleased to be partnered with them to partner with Shou and his team and off and running.
Operator: Our one from the line of Douglas Creutz with Cowen & Company.
Douglas Creutz: You talked a bit about some of the opportunities you’ve had using AI to create music. And I just wondered if you could talk a little bit about both sort of on the legal side, the rights issues that you have to negotiate with doing that. And then also just in terms of the relationships with the artists, obviously, AI has become a point of some significant tension in other entertainment fields and kind of where your discussions sit right now with respect to that?
Robert Kyncl: Yes. So as you can imagine, we are deeply engaged with our distribution partners as well as with the generative AI engines. So it’s like sort of 2 fronts that we’re having lots of discussion and collaboration around. I always view this as both defensive and offensive. And that is one of the reasons I mentioned in my opening remarks, some of the great progress we’re making around generative AI with some of our artists. And there’s a lot more that is happening behind the scenes that I have not talked about. And because it’s a creative tool. However, the thing that is important is that artists have a choice, because there are some that may not like it, and that’s totally fine. And then there are some that will embrace it, and that’s also fine.
And we have to make sure that we ensure that they have a choice and that something is not done to them that is done with them. And so, that is my utmost priority here, because there’s nothing more precious to an artist than their voice and protecting their voice is protecting their livelihood and protecting their persona. So, I want to make sure that we deliver on that. And at the same time, we deliver on opportunities that the tools can provide them.
Operator: Our next question comes from the line of Sebastiano Petti with JPMorgan.
Sebastiano Petti: Eric, just trying on this one here. You said you wouldn’t give us any color on ’24 in terms of margins, but can you help us unpack maybe the phasing in of the financial transformation program? What if — could you perhaps highlight what percentage or what you saw in the quarter? Was it material? Maybe how that will phase in through ’25? And as you’re looking into ’24, anything that we should keep in mind in terms of comps this year relative to ’22, which will perhaps normalize inside of 2024, thinking about the reported margin expansion, what that kind of looks like more on a like-for-like basis and ’23 seems to be better — better than perhaps — coming in on a reported basis. And then I guess another kind of cleanup question here while just on the emerging streaming platform, great that it’s going to be combined with ad-supported going forward to align with peers.
But could you give us an update on the underlying emerging streaming platform revenue perhaps in the quarter and trying to parse that out against the true underlying ad-supported growth, I think you called out?
