Oana Ruxandra must be one of the busiest executives in the music industry.
Warner Music Group’s chief digital officer and EVP, business development has steered a number of big deals in the past year.
In recent months, WMG has signed a series of agreements that are taking the major into the metaverse as well as embracing NFTs. Of course, new partnerships with platforms such as Roblox and The Sandbox are being made in tandem with ongoing partnerships that are developing as technology changes.
Here, Oana Ruxandra explains the opportunities with the new tech frontier for the global music industry…
It’s been a busy time with so many digital announcements at Warner Music, what’s driving this prolific deal-making period?
“All of the announcements that we're putting out are based on the detail and work of a team, my team, that’s amazing and working countless hours. And then, of course, our executive team that's supportive, and our labels. We have the incredibly extravagant luxury of being in a position to [partner with] so many different types of companies, so many different types of technology. Because everyone wants music - music makes things more engaging and more exciting. We've had the amazing opportunity to be in there first and lead things, and that's really because of the hard work of a lot of people, and also because our artists and fans want to be on these platforms and are on them.
“In terms of the ecosystem as a whole, technology has consistently changed the way people consume, and that's certainly the case with music as well. Whether it was vinyl, in the 1950s and 1960s, to CDs and tapes. With desktop, we started getting Napster and downloads, with mobile phones we started getting ringtones. So the ecosystem has consistently changed with technology. We're seeing that change now as well. Of course, with every technological change, it's based on changes from before. So it's an evolution on top of the previous changes. So what tends to happen is that the technological change is that much more impactful, much bigger at scale, broader and more interesting. And that's what we're seeing with Web3, this real shift in dynamic in the way in which people experience content and consume music.”
There’s a growing buzz around Web3 for music - what are the opportunities?
“Just taking that back a little bit, the ecosystem that we're in today doesn't provide a lot of opportunity for fans to be fans. If you want to provide or create value with your artists, you can buy some merch, you can go on a tour, of course you can stream on our partners’ platforms. But there are all these other moments of fandom that exist, certainly in the gaming space where you're buying a ‘skin’ for example, that fans have been craving for a long time. And that's really what Web3 is enabling, right? It’s enabling these moments of fandom, enabling more engagement, enabling us and our artists and their fans to create together, to build together and to be communities together. So what I think is really exciting about Web3 is not that it's taking us into something new and unbelievable. I'm sure that there are going to be unbelievable opportunities. But the foundation of it is in community, it is in what fans have always wanted to do. It’s what they were doing before the production of [recorded] music, when patrons would provide money to artists. And it's bringing us back to some of those core values of audience and artists becoming a community. That's why I think it's so exciting.”
Can you tell us about the new partnership with pay-to-earn gaming platform Splinterlands?
“We're in the process of developing a number of different ideas with Splinterlands that will be incremental opportunities for revenue and for monetisation. The crux of all of the investments that we make is fundamentally that we see that this shift is coming, and we want to make sure that we've partnered with the experts out there in the ecosystem. With Splinterlands it’s, ‘Hey, you guys have this amazing massive game, let's do something in the music space together.’ The point is that over the last couple of years we have built capabilities, we have built understanding, and we'll be able to build faster and faster as opportunities come to market.”
What is the synergy between music and gaming?
“As much as you see us experimenting and building in the gaming space, we're doing things with big fitness partners, and in AI and AR. Gaming is a piece of the overall puzzle. I think about the future of all content essentially being interactive and social - the community is creating content together. And gamification is a major part of keeping the interactivity, engagement and excitement going. The gamified experience will become incredibly prevalent across all of the different experiences that we have. So you'll see us spending a lot of time in the gaming area, because there will just be so many opportunities for cross-pollination.”
The opportunity for NFTs to enable ownership and incentivise the community is massive
David Guetta playing as an avatar on Roblox was a big moment - were there any lessons?
“We've had lessons across the board whenever we do something on Roblox. The David Guetta performance was great, it was different to a lot of our other artists [on Roblox], this was really a long-form experience. The main thing we learned is that it worked, let's do more, let's do something that's better optimised. What we've also understood is that ‘verch’ [virtual merchandise] is a big part of experiences across the board for Roblox, and we need to be dialling into those experiences. With the Twenty One Pilots piece [on Roblox] there were elements of gamification that will be really important as we go forward as well.”
Is the main revenue from licensing or in-game transactions?
“Both are contributing. I will say that the microtransactions of verch is what I expect to be the revenue driver in the future, and that's true of the ecosystem as a whole. I think that we will be monetising the concerts, we'll be monetising a subscription paywall, but I think all of the moments where a fan can actually engage and have a microtransaction like a verch moment will be the things that really upscale. That's where we can monetise incrementally and really create opportunity for artists.”
There’s also the Sandbox partnership and we know more and more artists are moving into that space…
“We're building in different ways on the platforms, because each one provides a different audience and a different type of customer base. But ultimately our focus for [Roblox and Sandbox] continues to be experimenting, and that's what the plan is for Sandbox. We've got land in this space, and we want to build up areas that are consistently engaging, which is going to be a good amount of work and a good amount of creativity. We're working internally, we're working with Sandbox, and we're working with the developers across the board. We're tapping into so many third-party experts in the ecosystem, working to understand what we can do.”
What does WMG’s series of NFT deals signify for that area of the business?
“I ultimately think that tokens are the next platform. We will, of course, have platforms and services that curate and market and bring a community together, but NFTs drive real utility. You have a group of people that are held together by the NFTs that they hold, they're incentivised to create value for that NFT group. You're creating value for that NFT group. So I think that tokens are fundamental to our future. And, by the way, not just music, but life. I'm a digital and tech person, I've been investing in this space for a long time. Ultimately, the opportunity for NFTs as utilities and to enable ownership and really incentivise the community is massive. I just think that there's going to be so much that we can do there.”
How important are ongoing partnerships as the digital side of the business expands?
“The whole of the company is putting all of their energy into the continued enablement of our biggest partnerships. And we assume that they will continue to be our biggest partners for a long time. We’re excited about this Web3 world and we're spending a lot of time and energy on it and moving towards it. But we expect that our [existing] partners will look to move as well and look to evolve.
“We've done our deal with Twitch, that's a really big deal and you'll see us do some great artist integrations over the next year. The fitness space - by which I mean wellness and health - is one that we've not even tapped. Our ability to use music to help with mood - we're at the very precipice of what that really looks like.”
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