Stu Bergen: We’re incredibly bullish in China

Above Image: WMG’s Stu Bergen andIñigo Zabala

Warner Music Group’s CEO of international and global commercial services Stu Bergen has discussed how the label group’s relationships in China arecreating opportunities for its international acts.

“We see an incredible opportunity in China,” he said. “[…] China is that perfect situation where you have an improving legislative environment that is getting more protective of intellectual property, you have companies that are providing good consumer opportunity, good consumer choice for streaming services. And after the Gold Typhoon acquisition we became an attractive partner.”

Speaking yesterday at the Midem conference in Cannes, France, Bergen gave a keynote to discuss WMG’s strategy. He was joined by WMG’s president of Latin America and Iberia,Iñigo Zabala, and by Brazilian artist Anitta. Moderating the session was Billboard’s Jem Aswad.

WMG has been working with Chinese music firm Gold Typhoon and Chinese internet giant Tencent since 2014. Bergen noted Tencent has “staggering” reach (“In a day they reach more people than exist in most countries”) and that the relationship is creating opportunities for the label’s international artists.

“A Danish artist, Christopher, recently played the QQ Awards and is going back to tour,” said Bergen. “It came from the virtuous circle of investing in domestic strength. […] That explains our mission of either investing or acquiring in countries to create opportunities for our artists.”

When asked which markets WMG is bullish on Bergen replied: “Latin America and South America and the whole region. Yes, there’s economic turmoil, but the market is ripe for growth and change. And also China; we’re incredibly bullish there.”

Zabala, who oversees Warner’s operations in 10 countries and started his career as an artist, spoke about why streaming helps WMG invest in global A&R and grow its market share.

“Streaming is giving us the opportunity to invest in international acts in a way that just three years ago would have been impossible,” he said.

In May Warner announced streaming had become its largest sourece of revenue for its recorded music business, with streaming revenue rising 59% in Q1.

During the keynote Zabala spoke about Latin America as a WMG priority.

“We are very optimistic about the future of Latin America,” said Zabala. “[…] Consumption per capita in Latin America is 1 dollar, but in the US 15 dollars, and in parts of Europe 18 dollars.”

In April the IFPI revealed Latin America was the globe’s top music market; it was the region that grew the most in 2015 at 12%.

“Latin America plus Spain and Portugal totals over seven hundred million people, what we see there is a lot of opportunities for our domestic and international artists,” he added.

Zabala used Twenty One Pilots’ success in Latin America as an example of an artist who struggled to achieve radio support just three years ago but has used streaming to underpin their success today.

“Twenty One Pilots have just done a tour and played in front of more than a quarter million people in Latin America in the last month,” he said.

Zabala said the label group’s investment in local artists in Latin America has gone from conservative to aggressive.

“In Brazil in the last three years we have more than doubled our digital market share and more than quadrupled our profitability,” he said.

Watch the keynote in full below: