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STRINGER ON SONY: ENTREPRENEURS WANTED

Two months into his reign at Sony Music, Rob Stringer says his next step is to find fearless executives unencumbered by the status quo.

“I will drive a culture of entrepreneurship,” the Sony Music CEO told analysts and Sony Corp. shareholders in Tokyo. “Our business units will be run by smart, risk-taking entrepreneurs who are natural self-starters and innovative in how they source talent, how they think about positioning and marketing that talent, and how they run their business units.”

Stringer’s ideal executives have ears for hits and “analytical eyes.” He sees Sony’s investment in IT infrastructure as a differentiator among the major music groups, noting that availability of real time information will “drive smarter talent decisions.

Noting the company will continue to aggressively spend cash in the near future, he zeroed in a few priorities: catalogue acquisitions; licensing and distribution deals; creating joint ventures; partnering with entrepreneurs; and securing new deals with established talent.

“It is essential that we expand our creative reach,” he said, singling out the company’s acquisition of The Orchard, which he noted was key to expanding label distribution services. “It is critical that we move quickly to get full benefit [of the investments].”

Stringer’s speech was accompanied by projections for the business in the coming year. Sony Corp. is projecting a slight increase in the music business overall, to $11.1b. The company projects a 30% drop in revenue from downloads in their current fiscal year that ends 3/31/18 and a 44% rise in revenue from paid streaming. Music video revenue is also expected to rise a modest 5%, while music publishing will be flat.

Operating income is expected to drop to $683m in the fiscal year from last year’s $700m.

Streaming, Sony Music COO Kevin Kelleher predicted, will help Sony increase marketshare. He also believes the growing number of streaming providers will help Sony as individual services attract new consumers; he’s extremely keen on voice-activated systems attracting older consumers and any service that figures out how to get into cars.

Stringer did not directly comment on the company’s current negotiations with Spotify, saying only,  “We are negotiating currently with our major streaming partners. It would be fair to say that no one would be surprised if there was pressure on pricing.”

And while not addressing future leadership at Columbia or Epic, he did confirm that the company’s international headquarters are now New York-based and no longer in London.

“We have eliminated the international HQ layer, to create direct lines between our New York centers, our U.S. creative centers and our international operations,” he said.

“Our business is our people, and we feel this enables greater co-ordination and collaboration between our business units—and provides a nimbleness in executing initiatives and strategies from New York.”

One of those initiatives is an expansion in China, which Kelleher predicted would be a Top 5 music market in three to five years.

Much as Stringer says he is looking for so-called disruptors, his vision for the company is not all that different from the leaders who preceded him.

“My vision for Sony Music,” he said, “is to be a global entertainment leader dedicated to building artist brands, long-term careers and maximizing profit at the same time.”

 

 

 

 

 

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