Photo: Cameron Strang, Chairman and CEO of Warner Bros. Records and Warner/Chappell Music with Greg Becker, CEO of Silicon Valley Bank. Photo credit: David Michael Photography
Cameron Strang spends a lot of time around actual rock stars, the ones who know the difference between a riff and a lick. I had the good fortune to sit down with the Warner Bros. Records and Warner/Chappell Music Chairman and CEO for a conversation in Santa Monica this week. A room full of local innovation CEOs joined me to learn how his entrepreneurial roots help him navigate the music business in the world of YouTube, Spotify and iTunes.
For one, he’s not constrained by convention. A trained lawyer who followed his love of music to start a record company – “I couldn’t have a career I wasn’t spiritually aligned with” – Cameron faces the challenges perplexing his industry straight on. He embraces technology and innovation and regularly sends his executives to Northern California to search out startups and strike up partnerships.
One of Cameron’s most searing valley memories came in 2003, when he was running an independent label. He was in the audience when Steve Jobs strode on stage to introduce iTunes. And the world for music business executives was, well, rocked. In hindsight, he says, “Nobody really knew what we were in for.”
In the intervening decade, he rose to lead one of the world’s most legendary record labels. Note to Cameron: Can I still say record label? Today, Apple – a technology company, he notes, -- is Warner Bros. biggest customer and its biggest source of revenue. At least for now; he hints Spotify is moving up fast.
Cameron spends a significant amount of his time pursuing new artists (Nico and Vinz – a chart exploding Afro-Norwegian pop duo) and working with legends (Tom Petty). These days he also figures out how to satisfy young people’s music tastes and their fast-changing consuming habits.
Though Steve Jobs’ iTunes announcement was just 11 years ago, 99 cent downloads are no longer the major disruptor in music. “Streaming is the rage. Streaming is coming on quickly and growing very rapidly,” Cameron says, “and that has a lot of ramifications for our approach.” But instead ofwringing his hands – or leaving the biz to become a VC as one former music exec in the audience volunteered he did – Cameron is genuinely amped up about what lies ahead: “One of the exciting things is what’s next?”
That optimistic spirit is what I appreciate about Cameron, an entertainment executive who gets that innovation equals survival. When Amazon proposed he join their marketing experiment to give away a song for free, he didn’t balk. He offered the first one up. Now, it’s common practice.
Cameron acknowledges that running an international music business in a world of startups requires nimble thinking. Just when the monetization model for dealing with downloads was gelling, now streaming is turning the business model on its head again.
In addition to making musical hits, “we have to be more efficient and creative and have a strong vision of where we are going,” he says.
That’s where his entrepreneurial roots kick in. Warner Bros. Records has been in the same Burbank headquarters for four decades and Warner/Chappell can trace its heritage back to Beethoven. (The Chappell in Warner/Chappell was the German composer’s music publisher.)
“The history of rock music is second to none,’’ he says, but it’s “different than a startup…so it’s a little bit more challenging” to instill that culture. But it’s critical for the music business to keep up with the current tempo of change, he says.
For now, monetizing streaming is key. As music moves from single 99-cent downloads to monthly $10 streaming subscriptions, revenues in flux. As Cameron explains the conundrum: “This is all about repeat enjoyment. If someone streams it 50 times a day that is more valuable than the person who streams it 5 times.”
On the flip side, his company has a treasure trove of content. While rights management is key to his business, Cameron says he is always looking to make content deals. He tells potential partners: “We’ve got a lot of great music. We'll hopefully show an open-mind and present an alternativeapproach.”
There is one certainty he says he can count on. Once he gets a grip on streaming, “There will be something else…wearables?”
He challenges anybody who says he is in a dying business: “People love music. It ebbs and flows on how we monetize it. How people consume it is going to change over time. It’s an incredible art form and has a profound effect on people and their lives.”
Seems to me Warner Bros. Records is a step ahead with a forward thinker like Cameron Strang, and I thank him for joining us for a great discussion.
Watch this space for many more conversations with amazing people in innovation throughout the rest of this year.
Photo: Greg Becker with American Idol's Randy Jackson,an attendee at the SVB event.
Photo credit: David Michael Photography