Good evening and welcome to Universal Music Group's Third Quarter Earnings Call for the period ended September 30th, 2024. My name is Nadia, and I'll be your conference operator today. Your speakers for today's call will be Sir Lucian Grainge, Chairman and CEO of Universal Music Group, and Boyd Muir, Executive Vice President, CFO, and President of Operations. They will be joined during Q&A by Michael Nash, Executive Vice President and Chief Digital Officer. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. As a reminder, this call is being recorded. Please also let me remind you that management's commentary and responses to questions on today's call may include forward-looking statements, which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may vary in a material way. For a discussion of some of the factors that could cause actual results to differ from expected results, please see the risk factors section of UMG's 2023 annual report, which is available on the Investor Relations page of UMG's website at universalmusic.com. Management's commentary will also refer to non-IFRS measures on today's call. Reconciliations are available in the press release on the Investor Relations page of UMG's website. Thank you. Sir Lucian, you may begin your conference. Thank you, and hello to everyone, and thank you once again for joining us. I'm pleased to report that Universal Music Group achieved yet another quarter of solid growth in revenue as well as EBITDA. Let me give you some color on our operating performance this quarter. I'll begin today with the progress we're already making on the strategic initiatives we outlined at our Capital Markets Day last month at Abbey Road Studios. First, our Artist-Centric strategy, which we view as crucially important for the streaming business to grow and flourish. Artist-Centric is a key pillar of our work to evolve the underlying business model of streaming, what we call Streaming 2.0. Take, for example, YouTube Music, which has become one of the fastest-growing players in subscription. On the strength of the very successful partnership we've built together, YouTube has recently committed to us that they will elevate priority given to surfacing premium artist content and enhancing content categorization measures to provide users with an improved experience and a more mutually rewarding connection between artist and fan. YouTube is also making the platform more attractive in numerous other ways. For example, offering user-friendly ways for fans to create and share collaborative playlists and their own artwork, including AI-generated images, and elements of this gamification in the form of badges for superfans are being introduced to create special identities for fans. We've been advocating such approaches with all of our platform partners because social enhancements like gamification lead to higher fan engagement and greater consumption of our artist's music. YouTube Music is now the first DSP to offer these features. We've also extended the application of our artist-centric philosophy to the AI arena in several important ways as we seek to drive innovation while future-proofing the music ecosystem. For example, we've just announced our strategic collaboration with KLAY Vision. This adds to our ever-expanding portfolio of tech entrepreneurs who are working with us to set generative AI on a course that is deeply aligned with the rights and interests of the entire creative community. KLAY Vision is developing a new ethical model for AI-generated music that works with the music industry and its creators to grow musical creativity and human artistry. We've also elevated our advocacy of artist interests through initiatives like our partnership with Roland on the principles of music creation with AI. More than 90 companies and organizations have signed on to the principles, and we've lent our support to the recently published statement of AI training, which has now been signed by over 25,000 people. Finally, as you might have had the chance to hear, if you joined this call early enough to listen to the whole music, we're also delighted to have collaborated with SoundLabs and Brenda Lee to bring you her iconic holiday season classic, Rockin' Around the Christmas Tree, to Spanish-language audiences in their native language for the first time ever through this very inventive use of responsible and responsibly trained AI technology. And this will be, we anticipate, just the first of many, many developments. It's another way, another example of the many ways that AI can be employed to serve the creative community, as long as we steadfastly adhere to artist-centric tenets. As we discussed at our Capital Markets Day, Streaming 2.0 will build on the enormous scale we've achieved in the first stage of streaming and create a sustainable and growing artist-centric ecosystem that improves monetization and delivers great experiences for fans. One key to this will be improving customer acquisition strategies to drive greater conversion from free to paid and then from paid on to the superfan tiers. This will enable us to segment and capture customer value at higher-than-ever levels. Achieving this requires a highly nuanced approach, adapting to the specific nature of each platform, taking into account the platform's individual product roadmaps, its distinct subscriber bases, and regional variations, particularly in fast-growing developing regions. Our work to usher in Streaming 2.0 is underway, and I look forward to providing you further updates in the weeks and months ahead. I'd like to say a few words now about our global acquisition and partnership strategy and the recent moves we've made in Belgium, the U.K., India, Thailand, Latin America, as well as China. When you look at our history, it's clear that Universal Music Group is an organization that was built over time by entrepreneurial visionaries. That is, we are constantly looking for entrepreneurs with unique visions with whom we can partner. And when we see a company that's a strong strategic and cultural fit, we summon our resources, expertise, and nimbleness, and our networks and relationships to acquire it. When we bring the acquired company into the fold, we don't make it disappear. We allow it to retain its identity, keeping it unique and thriving within the UMG family. This is exactly the case with our recent completion of the acquisition of PIAS, Play It Again Sam, which builds upon our 2021 agreement when we formed a strategic global alliance with them and acquired a minority stake in them. PIAS was first launched in Brussels over 40 years ago and operates two core businesses. The first, the PIAS Label Group, is home to the group's own and associated record labels. The Label Group will remain a standalone unit within UMG and continue to be run by PIAS co-founder Kenny Gates. Some of its in-house labels are Play It Again Sam, Harmonia Mundi, Demain, and Spinefarm. Their partner labels include ATO, Heavenly, Mute, and Transgressive. PIAS's second core business is Integral, a label services division which provides physical and digital distribution services to more than 100 independent label partners around the world. Integral is joining forces with our Virgin Music Group. The combined teams will provide independent entrepreneurs with premium services and access to a best-in-class international distribution network. This aspect of the acquisition enhances our ability to support the independent artist and label community globally while dramatically increasing our presence in this growing segment of the industry. Speaking of Virgin Music Group, just last week, it was announced the acquisition of Outdustry, a leading artist and label services business used by many of the world's premier independent labels and artists to market their releases into China and India. Outdustry has deep relationships with local labels and DSPs in China, and we're extremely happy to be bringing that expertise to UMG. In addition to its marketing services business, Outdustry also has a music publishing business and a record label both focused on signing local artists in China and India. As we previewed at the Capital Markets Day, our strategy includes expanding our reach into high-potential markets. Our acquisition of Outdustry provides another instance of that strategy in action. Yet another example of our commitment to grow in the high-potential markets is RS Group, the second largest recorded music catalog in Thailand. Last week, we acquired a 70% sorry, last year, we acquired a 70% stake in RS Group, and it was just last month that we acquired the remaining 30%. RS Group has a catalog of more than 10,000 unique master recordings and 6,000 copyrights, publishing rights, and licenses dating back more than four decades. Also, in September, we announced the launch of a new label division, Universal Music China Greater Bay Area, that once again makes UMG a true pioneer. The launch marks the first time a major music company has established a division in China's Greater Bay Area, the world's most populous urban area, which includes Hong Kong and Macau. The region's rich cultural fabric, woven from a diverse range of dialects, predominantly in Cantonese, has significantly shaped both local and Asian pop culture. The new label will be headquartered in Shenzhen. I've yet another significant development in China to highlight. The Rap of China is a nationwide TV hit that first aired in 2017. The show has attracted billions of views in the Greater China region and launched the careers of multiple local rappers. As recently announced, Universal Music Greater China has entered into a strategic agreement with iQIYI, a leading provider of online entertainment video services in China, under which we will exclusively distribute worldwide new releases from the signed contestants of The Rap of China, as well as those from its roster of over 20 breakthrough Chinese rap acts. This partnership will further enhance those artists' international presence and facilitate collaborations between Chinese hip-hop artists and top international talents. We love that kind of cross-pollination creatively. It should create groundbreaking musical works that carry cultural signatures and expressions. Again, something that we love to do and facilitate. Still, another high-growth region of particular focus for us is, as you know, Latin America. We recently announced that our Global Talent Services Business, or GTS, will become a standalone division company within UMG. GTS is a full-service company for Latin artists, spanning management, booking, live events, promotion, and brand partnerships. By separating from our local labels, GTS will now be able to also offer its services to artists outside of the UMG family. We also spoke extensively at Capital Markets Day about another strategic initiative to engage superfans with new products and experiences that unlock the economic potential of their fandom. With our partners, as well as our own, we are creating and monetizing new ways to meet superfans' demand for products, experiences, and access that will bring those fans closer to the artists that they love. I'd like to share a recent example. Olivia Rodrigo debuted her concert special, Olivia Rodrigo GUTS World Tour, on Netflix on October the 29th. The program was recorded as part of her 95-day sold-out arena tour, with Interscope's team both producing and executive producing the Netflix special. I'll now finish up by briefly focusing on the lifeblood of our company, our artists, and some of their recent achievements. Sabrina Carpenter, who we're so proud of, her album, Short n' Sweet, debuted at number one in 15 markets, including Canada, France, and Spain. It then went on to be number one for six weeks in Australia and four in the U.S., and Sabrina's latest single, Taste, has spent nine weeks at number one in Australia and the U.K. In addition, in the U.K., she's been number one on the singles chart for a record-breaking 21 weeks, including seven weeks for Espresso and five for Please, Please, Please, in addition to the nine weeks I just mentioned for Taste, breaking the record for the most weeks in a year for any artist since 1953. Post Malone's new album, F-1 Trillion, debuted at number one in the U.S., U.K., Australia, Canada, Norway, New Zealand, and the Netherlands. His single with Morgan Wallen, I Had Some Help, had already spent six non-consecutive weeks at number one in the U.S. Then Lady Gaga and Bruno Mars' single Die With A Smile has spent eight consecutive weeks atop the Billboard Global 200 and Global Excl. U.S. charts, marking the longest uninterrupted run atop each tally this year. Island Records in the U.S. continues its remarkable winning streak with emerging artist Gigi Perez, who currently has the number one song in the U.K. alongside stablemates Sabrina, as I mentioned earlier, as well as Chappell Roan and other phenomena we're immensely proud of. In the U.K., alternative rock band Snow Patrol captured their first number one album in 18 years with their recent release, The Forest is The Path, and Backbone, a collaboration between Chase & Status and Stormzy, has spent multiple weeks at number one on the U.K. singles chart. Lastly, in Japan, Mrs. GREEN APPLE's Lilac spent two weeks at number one on the Billboard Hot 100 and 18 consecutive weeks on the Billboard Japanese streaming songs chart. Let me close my remarks with one final note before I'll hand things over to Boyd. Actually, it's probably more than a note, more of a sort of a headline, and actually one that this time concerns Boyd himself. I'm delighted to announce that effective immediately, Boyd has been promoted to Chief Operating Officer at UMG Worldwide. As a result, we will be commencing a search for a new CFO. Of course, until a new CFO is appointed, Boyd will continue to perform in that role for us as well. Boyd's done an outstanding job leading the company's financial and operational functions through a period of unprecedented growth and change over the last 20-25 years, how the industry has changed, including our successful spinoff and IPO, as well as our first three years as a standalone public company. Now, with our strategic plan ahead of us that we outlined at Abbey Road at the Capital Markets Day, it's important that Boyd be able to fully focus on overseeing some of our key operational and strategic functions as COO. If you're able to somehow technologically, it'd be great if you could join me in congratulating Boyd on his much-deserved promotion. And on that, Boyd, let me turn it over to you to walk through our financials for this quarter. Thank you. Well done. Lucian, thank you very much. What you said means a lot to me. And I'm really looking forward to this new role and all of the exciting opportunities that are ahead of us. Anyway, now turning to the results for Q3. I'm pleased to be reporting on another quarter of solid revenue and Adjusted EBITDA growth at UMG. As usual, all of the growth figures that I will discuss today will be in constant currency, but before I go through our results, let me remind you that the third quarter of 2023 included an accrual for a catch-up payment from certain DSPs relating to the Copyright Royalty Board, Phonorecords III ruling, and music publishing. This prior year accrual amounted to EUR 53 million in revenue and EUR 11 million in EBITDA. In my remarks, I will present figures both including and adjusting for this item, and all of the details are also laid out in today's press release. Please note that there are no one-time items in the third quarter of 2024. UMG's revenue for the quarter of EUR 2.87 billion grew 5% year-over-year and grew 7% excluding last year's CRB accrual. Adjusted EBITDA of EUR 621 million grew 8% or 10% excluding last year's CRB accrual. Recorded music revenue grew 6% in the quarter, with strong performances from Taylor Swift, Sabrina Carpenter, Billie Eilish, Chappell Roan, Post Malone, and amongst many, many others. Within recorded music, subscription revenue grew 8.2% for the quarter. Our third quarter results are reflective of similar underlying trends to those we saw in the second quarter. As we have previously highlighted, some level of quarter-to-quarter variability is to be expected due to factors such as deal structures, the timing of reporting from DSPs, and other smaller items that can be difficult to predict. There are also items that cause differences in our quarterly reporting compared to our peers. For example, we include revenue from fitness partners in our subscription revenue. This quarter's result reflects ongoing challenges in the home fitness subscription market. It's also worth mentioning the loss of a distributed label that was acquired by a competitor. Collectively, these items negatively impact our subscription growth by just over a percentage point this quarter. As we outlined at our Capital Markets Day presentation, we see an opportunity to accelerate subscription growth through premium tier revenue enhancement, the development of super premium tiers, and the conversion of more free users to subscription. We therefore continue to affirm our subscription growth guidance in the 8%-10% CAGR range through 2028. As a reminder, in the fourth quarter of 2024, we will anniversary Spotify's 2023 price increases. Now turning to ad-supported streaming. Revenue was largely flat against the prior year quarter. Performance was mixed across partners as the digital ad market is reacting to evolving consumer preferences around short form and social content, as consumption and engagement have shifted faster than the monetization. The rate of growth did improve sequentially as compared to the prior quarter, largely thanks to our new Meta deal. As we look ahead, we remain confident about the mid to long-term growth drivers stemming from the advertising economy's digital migration, and we anticipate sequential gains in the quarters and years ahead. Physical revenue was also in line with the prior year quarter, a good result considering the difficult comp. As expected, we faced a very difficult comp with lower CD sales in Japan. But this was offset by the strong growth in vinyl sales, particularly in the U.S. We saw strong vinyl sales from Taylor Swift, Stray Kids, Sabrina Carpenter, and Chappell Roan. License and other revenue grew 22% thanks to increases in synchronization income, particularly from increased ad syncs in the U.S. and in Europe, as well as greater live and brands income. Download and other revenue declined 29% as this revenue continues to shift to streaming. Moving on to music publishing. Revenue grew 2% in the quarter and 15% when excluding the prior year CRB catch-up accrual. Within music publishing, digital revenue grew 23%, excluding last year's one-time item, driven by the growth of streaming and subscription, particularly in the U.S., U.K., and China. Synchronization income also saw healthy growth from ads and trailers in the U.S. and syncs with several luxury brands in France. In merchandising and other, revenue increased 4%, again despite a difficult comp. Direct-to-consumer sales grew with improvements across Europe, while touring merch revenue also increased thanks to higher activity in the U.S. with tours from artists, including Slipknot, Imagine Dragons, Nicki Minaj, Blink-182, and Post Malone. As I mentioned at the beginning of my remarks, Adjusted EBITDA of EUR 621 million grew 8% or 10% when excluding last year's CRB accrual. Adjusted EBITDA margin expanded by half a percentage point to 21.6%, helped by cost savings from our previously announced realignment plan, as well as lower A&R and marketing costs. These savings were partially offset by the negative margin impact from repertoire mix, physical product mix, and license and other revenue mix, where a higher share came from lower margin activities in the quarter. Moving on to share-based compensation expense, the total was €65 million in the quarter compared to EUR 103 million during the third quarter of 2023. We expect our share-based compensation for 2024 to be between EUR 290 and EUR 300 million, as this number can fluctuate based on performance. The third quarter also included EUR 30 million of restructuring charges, which are excluded from both EBITDA and adjusted EBITDA. While we originally anticipated 2024 would only include phase one of our previously announced organizational realignment plan, which carries EUR 125 million in restructuring charges, we have accelerated the start of phase two of the plan. We now expect restructuring charges for 2024 to come in between EUR 150 million and EUR 160 million, while most of the incremental cost savings will begin in 2025. The total size and timing for implementation of the full plan has not changed. From a cash flow perspective, we estimate EUR 65 million of cash restructuring charges in the second half of 2024. Additionally, aside from closing the transactions that Lucian discussed today, there are several other investments which we expect to make in the second half of 2024. Collectively, we expect an outflow of EUR 350-EUR 400 million in investment spending in the second half of 2024. At the same time, as I've said previously, we continue to expect net advances in the second half of the year to be significantly lower than the first half of 2024. As we shared at our Capital Markets Day, we continue to see enormous opportunity for value creation, both for our artists and for the company, as we advance our artist-centric and superfan initiatives and work to further capture the value of the engagement being driven by our unparalleled roster of artists and songwriters. Thank you. Lucian, Michael, and I will now take your questions. So, Operator, could you please open the line for Q&A? Of course. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to remove your question, please press star followed by two. When we're preparing to ask your question, please ensure your phone is unmuted locally. We ask you please keep your questions to two parts. Our first question goes to William Packer of BNP Paribas. William, please go ahead. Hi there. Many thanks for taking my questions. Two from me, please. Firstly, after the recent volatility, the market's particularly focused on subscription streaming trends, and today's acceleration is obviously very welcome. Could you help us think through the dynamics in Q4? In the prepared remarks, you referred to the cycling of the 2023 Spotify price increase. On the other hand, we recently heard that YouTube Premium had some price increases. Is it reasonable to think that subscription streaming should decelerate towards mid-single digits? Then secondly, the dust has now settled on the CMD, which was very interesting. One of the key focuses of the event was the outlook for mid-single digit ARPU growth. Could you help walk through the tools you have to help drive that? Specifically, would you consider using the wholesale price lever with DSP partners or perhaps incentives for pricing? And in that scenario, should we think of the contract renewal with DSP partners as the key catalyst? Thank you. Will, or should I say William? Will and Boyd, just on your first question, we don't give guidance, specific guidance on a quarterly basis. I'm just mentioning I did just mention or remind people about the Spotify's 2023 price increases anniversary out in Q4. So I think that's all I really have to say in relation to Q4 in terms of subscription. And thank you for your positive comment on Capital Markets Day. Yeah, we did. I mean, we talked about in terms of that guidance that we gave of 8%-10% CAGR through 2028. We said that approximately half of that was going to come from ARPU improvement, and half of it would actually just come from we've just gone moved, but we've come from subscriber growth. And I think it is important to actually say that as a content owner, we are in a position to be able to charge for that content at a price to reflect the value that the content is actually delivering. So that is a very important part of our consideration as we go forward in terms of the ARPU improvement. It's not just in that regard, the ARPU improvement. I mean, we're looking at a number of different aspects. I'll point out as well, we've talked about premium tiering. We do believe there's a significant opportunity for premium tiering in the marketplace. Again, I think, as we mentioned at Capital Markets Day, we believe that there's 20% of today's subscribers who are prepared to pay a higher price for a premium tier. So I think that's an important part of ARPU improvement in the more evolved markets. There's also the question or the point I would make, which goes back a little bit to artist-centric one, shall we say, which was there's definitely an opportunity to improve the quality of hygiene on the platforms where we continue to see various nefarious activity that really does need to be addressed. There's a combination of a number of things that we're actually working on with all of the platforms, which will contribute towards that 50% of the ARPU of the subscription revenue CAGR growth coming from ARPU improvement. To Boyd's very comprehensive response to your question, Will, I picked up one specific thing I wanted to follow up on. You asked about the YouTube Premium price increases, and I just wanted to directly respond. While we obviously can't get into specifics, we do benefit from YouTube Premium price increases, which apply to the bundled music product. We're always working to maximize participation of our artists and songwriters in the value that their content creates on our partners' platforms. We have an excellent ongoing strategic dialogue with YouTube and all of our partners about our rates with respect to their product portfolio. I just wanted to specifically pick up on that point. I think that Boyd did a very good job of covering the rest of your two questions. Thank you. And the next question goes to Adam Berlin of UBS. Adam, please go ahead. Yes. Hi. Good evening. Thanks for taking the questions. Two from me, if I can. The first one is, can you just give us a bit more detailed explanation on why ad streaming isn't growing? It seems like YouTube and Spotify, two of your biggest partners, are growing nicely. You've signed new deals with TikTok and Facebook. Are there any one-offs in there that help explain it? And should those one-offs come out in Q4 so we do get some growth in ad streaming in Q4? That's the first question. My second question is, there was a small but important improvement in the subscription streaming growth from Q2 to Q3, about 130 basis points. I know you said that there's lots of moving parts in there, but can you help us understand what you think is the most important reason why we did see that improvement in the subscription streaming growth in Q3? Thank you. Adam, thank you for your question. So with respect to ad supported, we've cautioned for several quarters now that we need to see broad-based improvements across multiple partners and geographies over a longer timeframe before we're ready to adopt a less cautious view. So our outlook right now remains cautious in the short term. The slow growth this quarter was largely driven by slowdowns in advertising revenue growth at major partners, as Boyd commented on in his remarks. While YouTube reported advertising growth over the last quarter, they don't break out music revenue from other entertainment verticals, and we would note that on their earnings call, management called out non-music content like sports as a growth category highlighted in their quarter, high engagement creator content surrounding NFL and Paris Olympics there. On our ad-supported streaming revenue, I would note that we've seen sequential improvements, year-over-year comparison of 4.2%. In the second quarter, we were minus 3.9%, and for the currently reported quarter, we're + 0.3%, and that's due in part to contribution from our new Meta deal. Our streaming revenue includes income from a wide variety of global and regional partners. It's important to keep that in mind. The composition of this category is much more varied than the subscription category in terms of the revenue capture models, in terms of the business models of the partners, and in terms of the geographic mix. We've also noted, and we're continuing to see this, the digital ad market remains volatile through the third quarter of this year with mixed results by platforms, and the other thing I want to emphasize, which Boyd covered in his comments, but just to double-click on this, we see a monetization gap that continues with long-form, short-form video platforms, with the increased activity on short-form and the monetization lagging on short-form. We expect that this will improve over time as budgets shift to follow the growing engagement in the short-form, but there's still a lag there, so that's contributing to the slowdown that you commented on. And then just in terms of subscription, I don't think there's anything to call out in this quarter. To Boyd's comments, the trends in Q3 were broadly similar to those in the second quarter. So I don't think that there's anything there to particularly highlight. Yeah. Just on that last point, Michael, Adam, I took a deep intake of breath there, but I still continue to please encourage you to look beyond individual quarters. There are always going to be fluctuations, both positive and negative. And I tried to give some examples of why this does happen. So I just want to encourage you to look at the trends over a longer term. In fact, at Capital Markets Day, when we talked about the 8%-10% on subscription growth over this next few years, again, I did emphasize, and I'll continue to emphasize, there's always going to be event-driven fluctuations that will cause some quarters, maybe even some years, for the growth to be higher or lower in individual kind of periods. So I just want to encourage you to look at the trend over the longer term than overly fixate on small fluctuations within any given quarter. Can I just also add, actually? I believe that if you look back over the last decade or so, what we now describe as Streaming 1.0 is we've been stimulating new businesses and new business models with a variety of partners in different segments. And part of that has been to help them scale the business and inject health into the entire music ecosystem. So here we are today with an ad-funded model with new segments like social, which didn't exist five years ago, with well over 600-650 million people paying for subscription. This has been intentional and by design. And here we are now at the advent of 2.0. Everything that you're asking and we're talking about, whether it's ad-funded or premium subscription or super tiered, super fans, it will all come from the development of our business relationships with the platforms. The critical importance that our music and our products and our audio-visual rights has to them, how we focus on that product innovation, and how we focus on it with our artists, with our own imagination internally, with our teams, as well as in partnership with the various DSPs who, as I said in my opening remarks, have all got different agendas and different products and different strengths and different views on different parts of the world and markets, and that part of that will come along over this next period. We can't be anything that we're not, which is long-term thinking. I've been in the company for several decades. We've been through this journey, and we will continue to go through this journey of long-term strategy and long-term growth, and the proof has been in the proof in our pudding has been in the eating. So with regard to ARPU, it's all part of our innovation product segment, how we work with the platforms, and how we work with our artists to actually develop and have them believe in what we're doing to create these new segments. So it's one of the reasons why we continue over the long term to be as positive and optimistic about everybody's future in the same way that I hope that we reflected at Capital Markets Day. Thank you. The next question goes to Ed Young of Morgan Stanley. Ed, please go ahead. Thank you. My first question was actually building on that answer, and you've been very comprehensive, so perhaps it'll be a relatively quick one. But you made comments about the drives for ARPU being pretty broad-based. You mentioned tiering and artist-centric. It feels like you've established, and you mentioned in your opening comments, some very constructive dialogue with your partners around those two in particular. When it comes to potential for a change to the payment model, whether that's subs or streaming, is that an open door, or is that something that you think may take a decent amount of time to convince your partners that that's in everyone's long-term interests just related to the long-term thinking you gave there? And the second question was just to sort of echo the congratulations to Boyd, but I wonder if you might be able to touch a little bit on the kind of transformation projects you'll be focused on in this new role. Thank you. Questions. With respect to the question on ARPU and our plans and our timing, to amplify a little bit the comments that Lucian made and that Boyd made, we've got very strong relationships with our DSP partners. We work collaboratively with them to grow the business. I think there's a bit of a misunderstanding about incentives and alignment. We're highly aligned with incentives around improving the monetization of music, and I think we've made the case articulately and passionately about how undervalued music is, that there is a tremendous core ARPU opportunity. Just to state this plainly, like any media company, we have the ability to charge an appropriate wholesale rate for our content. We've used this prerogative judiciously to enable the ecosystem to grow, to be vibrant and competitive. We're at a juncture right now. We've described this viewpoint around Streaming 2.0. We have an obligation to our artists to set appropriate wholesale price for our content. We do that today through a variety of platform deal structures, and that creates the portfolio of optionality that addresses, I think, the core of your question. Lucian spoke about all the work that's been done over the past 10, 15 years with what we call streaming 1.0 for the development of this ecosystem, and the underlying growth has been driven by a very compelling consumer value proposition. All the world's music, everywhere you go, on any device, we've waxed eloquently about that on Capital Markets Day, but just consider that in 2011, when Spotify entered the U.S. market, over that period of time in the U.S., there has been 40% inflation, and there has been one 10% price increase. So it's almost like we're reducing the price of this incredibly attractive value proposition over time. And that's obviously not the direction that makes sense from the standpoint of the interest that we have in advocating for our artists and working with our partners to maximize the value of music. So we think that we're at this juncture right now where we can consider, as Boyd articulated, that the path to future growth is equally about the underlying growth of the marketplace and also attending to the various opportunities to grow ARPU. So that is very much around product innovation and super premium tiers. It's about segmentation, doing a better job at looking at monetization of ad-supported. And it's definitely around optimizing how we're taking advantage of this very attractive core value proposition. Again, I think that ultimately we're fundamentally aligned. There is no diametric opposition in the relationships that we have with the DSPs around how we think about going after the customer value opportunity, and we expect to be able to make significant improvements both from the standpoint of product innovation, customer segmentation, and also rate structure associated with the underlying value proposition. Ed, thanks for your congratulations. Much appreciated. During Capital Markets Day, we outlined in great depth the strategy for us going forward and not wanting to repeat on all of those various pillars or those various initiatives. This new role is really for me to support Lucian in how we execute on all of those strategic initiatives, which are so important in how we actually position UMG in the marketplace, and how we redefine our relationships with the partners, and how we enhance our relationship with the fans and building that particular aspect of the business. So that's really how the role, without going into kind of greater specifics about it, is just how I can help Lucian execute on the strategic priorities that lie ahead of us. Well, my focus is product, product, product, and people, people, and entrepreneurs in continuing to grow our business throughout every single region and every single culture. And then you add on to that how we develop and how we innovate and how we bring along the entire ecosystem into Streaming 2.0, which obviously includes not only subs but premium and ad-funded. We are the market leader, and this new role will help me and support me from an organizational point of view. And we will focus and have even more focus on looking at the various commercial opportunities that exist not only internally, but as we see is how we actually develop the business, and the business continues to alter and change over this next period in exactly the same way that it has done over the previous one. Thank you. The next question goes to Michael Morris of Guggenheim Partners. Michael, please go ahead. Thank you. Good afternoon. A couple of questions for me. First, Lucian, you mentioned providing further updates on Streaming 2.0 in the weeks ahead, and I'm curious if that means any type of product or additional detailed announcement would happen before the end of the year. Secondly, the topic of wholesale pricing has come up a fair amount, came up at the Capital Markets Day and on this call. I'm curious if you would share whether you would be interested in having your DSP relationships shift to wholesale relationships pretty much exclusively, kind of like we've seen in the video industry where there's pricing with escalators as opposed to having some volatility around sort of per stream on a periodic basis. And then the last thing, just quickly, TikTok announced they're shutting down the music business after your Capital Markets Day. So So we didn't get a chance to ask you about that. I'm curious if you think that will impact your business at all and your thoughts on why maybe it's not working for them where streaming music clearly has worked for a number of other major platforms. Thank you. Good questions. Michael, I think I'm going to ask you to respond to some of the technical details, and then I may give an overview later. So with respect to the question on pricing and the models and looking at a wholesale with escalators type of arrangement, right now we have underlying rate structure, very commonly three different prongs of revenue capture around per play, per subscriber minimum, and rev share. I think the question of looking at the rate card and the adjustments of the rate card is a little bit separate. And I think that we actually have a more sophisticated model than simply setting a price and then having future agreement on price increases because we have measures in our agreements that capture the value that our content's created on the platforms in more than just kind of a single principal or single prong way. But we're at a stage right now of evolution and development and innovation. And we're considering all the options that will enable our artists and songwriters to appropriately participate in the value that their content creates on our partners' platforms. In terms of TikTok Music specifically, I think it's really a question for them. I would say this: that they have a successful integration program with the DSP services that does enable conversion of consumption on TikTok to subscription platforms that we've noted. So they continue to have kind of a direct instrumental relationship in taking consumers on that journey from discovery on their platform to becoming customers of subscription platforms. And they have their own priorities, which again, I think makes this question one that is better suited to be directed to TikTok. On the first part of the question, as we continually remind everybody, we don't control the price. We don't control the retail price. And I'm not prepared to share confidential information or confidential internal strategies on what our innovation is and the innovation in the various segments that we focus 90% of our time on with these business partners. But this is what our focus is. And it will come from innovation. It will come from their innovation and our innovation for what we need as simultaneously for what they need and how the business is developing. I bring you back to the point that I made earlier about subscription streaming 1.0. We are at the beginning of 2.0. And 1.0 was in its, I suppose, individual format for a decade or so. And we have segments of revenue that were completely unimaginable three or four years ago. And my prediction is that we'll be having exactly the same conversation over this next period. And everything that we do with the platforms, as well as our artists, as well as all the creative teams within the business internally, in a thoughtful, confidential, strategic way, is about accelerating that as quickly as we can. So it's game on. Thank you. The next question goes to Devin Brisco of Wolfe Research. Devin, please go ahead. Hi. In your prepared remarks, you mentioned another recent AI collaboration, this one with Klay. To the extent AI assists artists in creating new music, can you discuss how you participate in those streams? Should we think about your net economics as similar to any other album release? You're providing more value to artists, but I'd also presume these AI partners get some share of economics. So how should we think about the net margin impact of those two dynamics? And related to that, I'd imagine there's some benefits from more music being created due to improved overall efficiency. Is there anything you can share about adoption of AI tools by your artists so far and how that could accelerate your output over time? Devin, thank you for your question. So with respect to AI, the creation of new music, and the Klay partnership that you specifically referenced, let me just provide a little more detail on this new partnership that we announced with Klay. Our strategic collaboration there, as Lucian said, is expanding this portfolio that we've developed with tech entrepreneurs. And they're working across a variety of different areas in the field of AI and generative AI. Our focus is really on the core underlying philosophy, which translates into our strategy along simple lines: focus the conversation on artists, protect their rights, advance their interests, and from that foundation, build the creative and commercial opportunities, so everything we're doing is really about enabling artists and recognizing and protecting and advancing their rights. Now, with Klay, what they're doing is developing a new ethical model for AI-generated music that works with the music industry and our creative ranks to enhance musical creativity and human artistry. They're part of the latest cohort of Amazon's AWS AI Accelerator program, and with that help, they're developing a foundational model for music that they see as significantly advancing the state of the art there in conjunction with music rights holders. So this is really about establishing an ecosystem for specific AI-driven experiences and content that will prioritize accurate attribution in working with rights holders. And this isn't something that's going to really compete with artist catalogs at traditional music services. Now, just unpacking your question a little bit and kind of going to how the economics work, as Lucian commented, at the end of the call, you heard the new Spanish language version of Brenda Lee's iconic holiday season classic. And that's an instance of creating, and we've talked about this before, an opportunity for the artist to address a new audience in their native language that they haven't been addressed directly before by the artist. That content was created working with Brenda Lee, developing an AI vocal model trained on her content, and then married to a Spanish language performance, and then in the production studio, bringing these elements together into a unique creative composition. All the rights there in the monetization exploitation of that content basically will transpire in the same way that we would monetize any other copyrighted content. In terms of the question around tools, we're working with a number of different partners. We've announced in our relationship with YouTube the establishment of an AI music incubator, which is all about putting artists directly into the conversation about advancing AI development in relationship to their creative ambitions. We've announced partnerships with other companies that Lucian hit on in his comments. Roland now has 90 different enterprises and institutions signed up to their ethical AI initiative. That's really about music creation and ethicality and expanding the palette for artists to work on. We've also established partnerships. The SoundLabs partnership was the underlying partnership that enabled the Brenda Lee composition partnerships with BandLab in the past and others that we've announced recently with ProRata, with other entrepreneurs in the space. There's a wide variety of different AI enterprises that we're enabling. The portfolio is expanding the opportunities for artists. We're at the very beginning stage of putting the tools in the hands of artists. Everything that we're doing goes back to this artist-centric philosophy of focusing the conversation there on artists, looking at their interests and advancing them at the same time that we're protecting their rights and building new creative and commercial opportunities on top of that. Thank you. Our final question goes to James Heaney of Jefferies. James, please go ahead. Great. Thanks for taking the question. Lucian, you started off this call talking about YouTube and the work that they're doing to create a better experience for music fans. Could you talk about how these initiatives translate into better financial results and if there are any specific features that you'd call out as being most impactful? And then for Boyd, as part of your Capital Markets Day outlook, you talked about growing EBITDA at 10% CAGR through 2028. Could you just talk about the specific drivers of margin expansion in the business going forward? And are there any particular areas that you're most focused on? Thanks. Maybe I can pick up some of the detail on the question around the artist-centric initiatives and Lucian's comments on YouTube, and then we could maybe go to kind of a more general and higher level of conversation from there. With respect to our partnership with YouTube, the prioritization of premium content and the servicing of premium content and enhanced content categorization goes to improving the experience of our artist content on the platform. It's part of what we highlighted at Capital Markets Day. In addition to the specific implementations of artist-centric models with Spotify and Deezer, you see our artist-centric philosophy being advanced in a variety of different ways with a number of partners, supporting entrepreneurial anti-fraud efforts, our partnership with Beatdapp, which we announced earlier, embracing royalty model rewards for higher quality artist music, and Apple Music's royalty boost for Apple streams has been publicly reported. We're more broadly applying these principles to protect human artistry with respect to AI proliferation. We've commented on that to a pretty significant degree. All of these efforts are about reorienting the ecosystem to focus on artists and music that truly matter, so all these incremental steps are part of that journey, but we also see significant changes in terms of the royalty model with the implementations of artist-centric with Deezer and Spotify, and then the focus on super premium tiers. It's all part of the same conversation, so ultimately, what we're working to do is to focus in our partnership with the platforms on enhancing the experience and enhancing the artist-fan relationship that's really driving the business model of these platforms, so all these elements are part of that equation. And James, maybe I'll take the second question, which was about the 10% Adjusted EBITDA CAGR through 2028. I mean, the primary driver of our EBITDA or Adjusted EBITDA growth is really coming from the revenue growth. We guided to 7% plus CAGR on revenues. We talked a little bit earlier in terms of subscription growth. We talked about between an 8% and a 10% CAGR through 2028. So really, it is the operational leverage that we have, and that revenue growth will be the primary driver of the Adjusted EBITDA CAGR. And then secondly, we have, and we talked again today, we have the strategic realignment, the organizational realignment program that we are undertaking that we've largely completed on phase one. We commenced on phase two a little bit sooner than we had initially envisaged. And our commitment in that program is that we will deliver €250 million of savings in terms of run rate by the end of 2026. So I think they are the two, and there's a hundred things underneath that, but they are the two major drivers which will give rise to the 10% Adjusted EBITDA growth CAGR. Thank you. That's all the questions that we have time for today. This now concludes today's call. Thank you for joining, and you may now disconnect your lines.