Welcome to Warner Music Group's first quarter earnings call for the period ending December 31st, 2020. At the request of Warner Music Group, today's call is being recorded for replay purposes, and if you object, you may disconnect at any time. Now I would like to turn today's call over to your host, Mr. Kareem Chin, Head of Investor Relations. You may begin. Good afternoon, everyone. Welcome to Warner Music Group's fiscal first quarter earnings conference call. Please note that our earnings press release, earnings snapshot, and the Form 10-Q we file this afternoon will be available on our website. On today's call, we have our CEO, Steve Cooper, and our Executive Vice President and CFO, Eric Levin, who will take you through our results, and then we will take your questions. Before Steve's comments, I would like to refer you to the second slide of the earnings presentation to remind you that this communication includes forward-looking statements that reflect the current views of Warner Music Group about future events and financial performance. We plan to present certain non-GAAP results during this conference call and in the earnings snapshot slides posted on our website and have provided schedules reconciling these results to our GAAP results in our earnings press release posted on our website. Also, please note that all revenue figures and comparisons discussed today will be presented in constant currency unless otherwise noted. All forward-looking statements are made as of today, and we disclaim any duty to update such statements. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, and projections will result or be achieved. Investors should not rely on forward-looking statements because they're subject to a variety of risks, uncertainties, and other factors that can cause actual results to differ materially from our expectations. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our earnings press release, our Form 10-Qs, Form 10-K, and other SEC filings. With that, I'll turn it over to Steve. Thanks, Kareem. Good afternoon, everyone, and thanks for joining us and welcome to our first quarter earnings call. We're happy to usher in a new year, and we're excited about all that 2021 has to offer. With a broad vaccine rollout on the horizon, we're hopeful that the world can safely begin to reopen and that we'll start to see some return to normalcy. In the meantime, we're very fortunate that our core streaming business remains as strong as ever and that music has a rapidly growing presence in new and diverse applications. In fact, Q1 was the highest revenue quarter in our 17-year history as a standalone company. Our revenue grew 4% year-over-year from our previous record high in Q1 of 2020, an achievement that we're especially proud of, given that we accomplished this during the pandemic. The strong double-digit revenue growth in digital more than offset the continued disruption in recorded music's artist services and expanded rights revenue and music publishing's performance revenue. Excluding revenue from those areas, our year-over-year revenue growth in Q1 would be approximately 8%. Adjusted EBITDA was up by approximately 20% year-over-year, with margins improving to over 22%. Even with the decline in lower margin revenue streams such as artist services, this growth highlights the operating leverage driven by digital's increasing contribution to our overall revenue as well as our focus on operating cost management. Our recorded music revenue returned to year-over-year growth and was up approximately 5%. Double-digit growth in digital revenue more than offset declines in physical and artist services. Our primary goal will always be to create and deliver a constant, ever-growing flow of dynamic and diverse new music. Our success was on full display when the Grammy nominations were announced in late November. Artists from every one of our U.S. label groups were recognized, as well as talent from the U.K., Nigeria, Jamaica, and Germany. We had two of the most nominated artists of the year, with previous Grammy winners Dua Lipa and Roddy Ricch each getting six nods. Excuse me. We also did very well in the big four categories with two nominations in each: Coldplay and Dua in Album of the Year, Roddy and Dua in Record of the Year and Song of the Year, and Chika and triple nominee Ingrid Andress in Best New Artist. 2020 was a landmark year for our labels, with Atlantic taking the number one spot for the fourth consecutive year in on-demand audio streams in the U.S., as reported by Nielsen. Looking ahead, we expect this winning streak to continue with some amazing music from both our emerging talent and global superstars. In music publishing, revenue was essentially flat in the quarter, with digital revenue growing almost 36% year-over-year. This impressive jump was offset by the dislocation in performance, where revenue was lost from the ongoing closure of bars, restaurants, clubs, and concerts. Mechanical was down given the continued contraction in physical sales. Sync was also down, but we expect an upward trajectory as COVID subsides and television and film production resume. Warner Chappell continued its creative revitalization in Q1 as its writers contributed to 10 number one charting singles in the U.S., including hits from Pop Smoke and Ava Max. Warner Chappell Nashville continued its impressive run, being named Country Music Publisher of the Year by ASCAP for the eighth consecutive year, and by BMI for the third consecutive year, while winning Song of the Year from both. On the international front, Warner Chappell topped charts across the globe with releases from MNEK, Master KG and Nomcebo, Rauw Alejandro, and Jhay Cortez, to name a few. There's been a lot of coverage about new players doing big money deals for music publishing assets. This is powerful recognition of the value of music, and we're willing and able to do those deals when we believe they make sense. However, given our rigorous financial discipline, we never buy market share at a loss. Instead, we're in the business of developing songwriters' global careers and catalogs. We build value over the long term through our extensive expertise in global infrastructure. With this in mind, Warner Chappell is unique among the majors for having established a dedicated creative services team that mines our catalog for incremental revenue. As one example announced just last week, our creative services team helped launch the 50th anniversary celebration of The Sound of Philadelphia. This launch includes a partnership with smart speaker manufacturer Sonos for a new radio program, which we're honored to have hosted by longtime Warner Chappell icon, Kenny Gamble. We also have a suite of proprietary tools that helps us create new licensing opportunities all around the world for our deep catalog and hidden gems. These tools include our song demo database, ARROW, and our Beat Broker service, offering easy-to-clear curated songs for sampling. As we've said before, we have a one-company philosophy, and Warner Chappell and recorded music work closely together to maximize the value of all rights. Our sound recordings and our musical compositions are critical to any comprehensive music service offering. Warner Chappell's fractional or full ownership of well over a million songs gives us an expanded reach in all of our digital negotiations. As we look ahead, our revenue opportunities are vast and diverse. We continue to see robust growth in both subscription and ad-supported streaming, with plenty of runway around the globe. At the same time, the pandemic has accelerated consumer adoption in areas like in-home digital fitness, video gaming, live streaming, and social media. These platforms rely heavily on music, and we're at the forefront of helping them invent and evolve new commercial opportunities. Here are just a few examples from this quarter. With the rapidly growing gaming market, two clear trends have emerged, games as virtual shared social spaces, and a shift towards user-generated content. Our recently announced stake in Roblox aligns WMG with the leading platform at the intersection of both of these trends. Roblox is a metaverse of social experiences with an in-game currency, Robux, and 40 million daily active users, each on average, spending more than 2.5 Hours per day on the platform. That level of engagement is unmatched by social networks. As the only music company to have invested in Roblox's last round, we're in a pole position to create next-generation music-based fan experiences and products. We have a number of upcoming events that we're excited to announce in the near future. Second, our ever-expanding relationship with TikTok. Since being launched outside of China a little over three years ago, the social media app has reportedly attracted more than 1 billion monthly users. TikTok's creator community now has broad access to the latest hits and classic tracks from our artists and songwriters. Our deal with TikTok will also see us collaborating on imaginative marketing campaigns and offering new ways for fans to express their creativity. There is exciting competition in this space with other companies like Instagram, YouTube, Snap, and Tencent also exploring how to weave more music into everyone's social media feeds. Third, we revealed last week that we will be a launch partner for Adaptr. This is a first-of-its-kind service that enables developers to quickly and easily license music. Adaptr is designed to accelerate innovation, reduce infringement, and generate incremental value for our artists and songwriters. With so many startups experimenting with music, Adaptr allows them to go straight to market and forge a whole new frontier of commercial possibilities. Fourth, we're differentiating WMG in the marketplace through our collection of owned and operated direct-to-consumer destinations. This global network brings us closer to millions of music fans while helping us better understand their behavior and emerging cultural trends. Our consumer brands, EMP and UPROXX, as well as our social content publisher, IMGN, all showed double-digit revenue growth in Q1. As our business continues to be pressure tested by COVID, these destinations have been a stabilizing force, adding to this quarter's strong results. The biggest contributor was EMP, our European merchandising retailer. With many brick-and-mortar operations remaining under COVID restrictions, EMP seized the opportunity and drove its first quarter revenue up by over 30%. A clever marketing plan generated healthy sales from Black Friday through Cyber Monday, with average order values over those four days increasing by 36% year-over-year. We recently brought in Maria Weaver as president of our global artist and label services network, WEA, to oversee all of our D2C efforts. Previously chief marketing officer for Comcast Advertising, she brings a wealth of new ideas and expertise to help monetize our ever-widening range of music products and experiences. As COVID continues to test our resolve, we've adapted and become even more resourceful in finding ways to enhance our company's results. Under difficult circumstances, we've achieved record-breaking results, all the while maintaining our track record of financial discipline. We have some fantastic new music from amazing artists and songwriters on the way, and we continue to grow our investment in a new generation of talent while inventing bold and memorable ways to impact global culture. With that, I'll turn it over to Eric. Thank you, Steve, and good afternoon, everyone. We are extremely pleased with our financial performance in the first quarter. Fiscal Q1 of last year was a record-breaking revenue quarter for our company and was also the last reporting period that was unaffected by COVID. Against that difficult comparison, and while still navigating the challenges presented by the pandemic, we not only returned the company to growth, but we've also set a new all-time high for quarterly revenue in our history as a standalone company. Our business model has proved to be robust and flexible, underpinned by continued strong growth in digital and our D2C businesses, as well as our financial discipline. While COVID continues to challenge some areas of our business, we've leaned aggressively into other opportunities whose growth prospects were accelerated by the pandemic. We expect this will position us favorably as things return to normal. Moving to our performance in the quarter. Our total revenue was up approximately 4% on a constant currency basis and up 6% on an as-reported basis compared to the prior year quarter. Artist services in recorded music and performance in music publishing were the areas most affected by COVID due to the cancellation or postponement of touring. If you exclude those areas, our revenue grew 8% on a constant currency basis and 10% on an as-reported basis compared to the prior year quarter. Both Adjusted OIBDA and Adjusted EBITDA saw significant year-over-year increases in the quarter, reflecting the continuing revenue mix shift from physical to digital. Adjusted OIBDA increased approximately 18% to $282 million, with margin improving from 19% to over 21%. This improvement was driven by an increase in contribution from higher margin streaming revenue, cost management initiatives, and the impact from certain previously announced transactions that closed in the quarter. Adjusted EBITDA increased 19% to $297 million, with margin improving from 20% to over 22%. This increase was largely due to the same factors that drove our Adjusted OIBDA performance, in addition to higher pro forma savings that we expect to realize from our transformation initiatives and the pro forma impact of those previously announced transactions. Those transactions contributed $5 million to Adjusted OIBDA and $9 million to Adjusted EBITDA in the quarter. Adjusting the impact of that contribution or excluding the impact of that contribution, our Adjusted OIBDA and Adjusted EBITDA grew 13% and 16%, respectively. Adjusted OIBDA excludes one-time costs related to restructuring and other transformation initiatives, COVID-related expenses, and non-cash stock-based compensation expense in both the current and prior year quarters. Adjusted EBITDA excludes these items and includes pro forma savings that we expect to realize from our transformation initiatives and the pro forma impact of those previously announced transactions. Please refer to our press release for calculations and reconciliations. In recorded music, Q1 revenue increased approximately 5% over prior year quarter. Digital revenue grew 13%, driven by a 16% increase in streaming revenue. Streaming as a category, saw growth across all key components, with both subscription and ad-supported streaming growing double digits, and growth in revenue from emerging streaming platforms far outpacing the broader category. Physical revenue declined 9% as the effects of the continued transition to streaming and COVID were partially offset by strong physical releases in the quarter. Licensing revenue declined 1%, driven by lower deal activity in advertising, television, and film related to COVID, offset by certain one-time settlements. Artist services revenue, which includes tour-related merchandising as well as our direct-to-consumer merchandising through EMP, declined 9%. While revenue related to concert promotion and tour-related merchandising declined significantly year-over-year, EMP saw healthy growth of over 30%, driven by a strong holiday season as COVID restrictions limited brick and mortar shopping in Europe. For Q1, recorded music Adjusted OIBDA increased 16% over the prior year quarter to $275 million due to a revenue mix shift toward digital and overall cost savings. Adjusted OIBDA margin increased two percentage points to 24%. Music publishing revenue declined 1% in Q1 as digital revenue growth of 36%, driven by an increase in streaming revenue, and was offset by declines in performance and sync, as well as a decrease in mechanical revenue. Music publishing Adjusted OIBDA increased 18% from $34 million to $49 million, with margins improving from 20% to almost 23% due to revenue mix. In the first quarter, operating cash flow increased to $169 million compared to $78 million in the prior year quarter due to strong operating performance and timing of working capital, including payments from certain digital services. Free cash flow decreased from $46 million in the prior year quarter to - $174 million. This decline was driven by increased investment activity related to those previously announced transactions, partially offset by an increase in operating cash flow. CapEx in the first quarter was $18 million compared to $15 million in the prior year quarter. The increase is related to our previously announced plans to upgrade our IT and finance infrastructure. The total investment associated with this program is expected to be about $20 million in fiscal 2021, with annualized run rate savings of approximately $35 million-$40 million once fully implemented. For fiscal 2021, we expect total CapEx to be in the range of $90 million-$100 million. Cash taxes were $17 million in the quarter. On December 1st, we paid our regular quarterly dividend of $0.12 per share for an aggregate dividend of $62 million for the quarter. As of December 31st, we had a cash balance of $566 million and net debt of approximately $2.8 billion. On November 2nd, we completed a $250 million tack on to our 3% senior secured notes due 2031. The proceeds of this financing, in conjunction with cash on hand of approximately $90 million, we used to fund those previously announced transactions for aggregate cash consideration of $338 million. Additionally, on January 20th, we completed an amendment to our term loan credit agreement. The amendment extends the maturity from November 1st, 2023 to January 20th, 2028, and removes a number of negative covenants. In closing, we are encouraged by our first quarter performance, which gives us a strong start to the year, although challenges related to COVID remain. Our solidly inline streaming growth, combined with our outperformance in our D2C business and strong physical releases in the quarter have only increased our conviction in our ability to achieve strong growth in fiscal 2021. We thank you for joining our call today, and we will now open the call for questions. Our first question comes from Michael Morris with Guggenheim. Your line is open. Thank you. Good afternoon, guys. Couple questions from me. The first one's on streaming and those streaming revenue sources that were strong in the quarter. Eric, I'm hoping to maybe push you a little bit on some more detail of the contribution from the new partnerships and the relative performance of the subscription side versus the ad side. Sounds like all were strong, any additional detail you could give us on maybe relative performance and also how those are pacing in the fiscal second quarter? My second question, there are a couple of things specifically that you've cited as benefiting during COVID. You've had your virtual concerts. Steve, you spent some time talking about EMP. My question is, as we look forward and hopefully see things starting to open up, do you expect some regression in those areas, or do you think you can continue to have a strong base and see perhaps a live event recovery? Thanks, guys. Okay, great. Let me tackle your first one. As we break streaming into kind of the three broad categories of subscription, ad-supported, and emerging forms of digital revenue. Subscription and ad-supported are, I would say now, both in line, both growing similar amounts in double digits, and that is great. Subscription had been growing from COVID double digits throughout the whole time, but advertising initially took a dip and then has quarter by quarter been showing progress. This is the first quarter that we can say it's been double digits, so it feels like the ad-supported streaming has really recovered, and its growth is really in line with where we'd expect it to be. On the emerging forms of streaming, they continue, as they have in the past, to grow at a significantly faster rate than both subscription and ad-supported. That's both because the category and social and gaming and fitness, live streaming are all really coming online and growing at an accelerated rate, but also because there's new platforms that emerge that we continue to do deals with. We have a broader array of partners that we continue to add there. We see no reason why these trends across all three of these categories won't continue going forward as we continue to see strong performance in those categories. Plus, we also have a high degree of confidence in our strong release schedule going forward. As far as the category, we would expect to see them going forward, even as we come from COVID, especially, I think, Michael, you were referring to the emerging streams. Look, we see this as a growth area even after we come out of COVID. We think that consumer behavior around social, gaming, the real explosion of metaverses are growth areas going forward, and we see these as areas that we continue to see innovation in, new platforms coming online, and continued strong growth going forward, both during a COVID-affected era and thereafter. Thank you for that. Just to clarify on that second part, on EMP and that physical direct-to-consumer in particular as well, you feel that this is a base that's growing and will be strong sort of even post the reopening? Do you think there's perhaps a little bit of a trade-off there with perhaps live events, merchandising, or anything like that? Thank you. That's a great question. EMP is a business that when we acquired about three years ago, that we had real belief in their ability to grow their business long term. Nothing we have seen has caused us anything but to have increased confidence in the business and the management team running EMP. It's certainly true that the closure of brick-and-mortar businesses has driven consumers more to e-commerce platforms, and EMP has both been a benefit of that, but EMP has also not been passive. They have broadened their product line. They've innovated their marketing tactics and continue to sharpen their skills in reaching their customers, but also expanding their customer base across Europe. Although 30% growth may not be the norm in the future, we see growth and solid growth in that platform as something that we will be managing towards both during the COVID-affected era and thereafter. Okay. Thank you. Thank you. Our next question comes from Alexia Quadrani with JP Morgan your line is open. Thank you very much. Can you talk about the impact from acquisitions you highlighted on your last call? I believe it was like $338 million. How did that impact your results this quarter? What do you expect the impact to be going forward? My sort of follow-up question is sort of a follow-up on your commentary and your answer to Michael's question. I think he asked about the emerging growth platforms for gaming and fitness and stuff, and how you will do there when the economies reopen. I guess my follow-up on that is a little bit different in the sense is, if we do see a pullback in gaming and we do see a pullback in fitness in terms of engagement, is your penetration level so early days that regardless of maybe a pullback in engagement in the broader population, you still can see kind of robust growth on those platforms because you have so much more to kind of grow within the existing platform? On the M&A one, the M&A that we're talking about that we acquired for $338 million, in Q1, it had a $5 million incremental OIBDA impact and a $9 million incremental impact to Adjusted EBITDA. Note, as we look at it on an annualized basis, and those numbers are in line with our expectations, that the kind of run rate OIBDA on an annualized basis was about $37 million, and you can see how that's kind of consistent with these numbers and these businesses performed right in line with expectations. As far as emerging platforms, what I would say is we see music becoming more and more integrated across Social gaming, metaverses, the various places where live streaming is integrated. We see it as being very early days, and we see the ubiquity of music across so many different forms, both existing and new, really kind of just finding its stride, that we fully expect to be managing that line for growth both during COVID and thereafter. Thank you. Thanks, Alexia. Our next question comes from Ben Swinburne with Morgan Stanley. Your line's open. Thanks. Good afternoon. I would like to hear from Steve on the strategy for these emerging digital platforms. What I mean by that is, the press reported you guys signed, I think, a second TikTok deal in a relatively short period of time. I think the first one was in April, this most recent one just in January. I know you can't talk about specifics, but as these agreements evolve and you renew them, what other than trying to maximize your revenues are you trying to accomplish? How do these agreements and the business models behind them, in your eyes, evolve over time? Do they eventually look and feel like kind of streaming, so it's a rev share and relatively predictable, or do you think these are going to be quite different? Also specific to TikTok, hopefully, you can comment. They reported that there were over 70 artists that broke on TikTok and were signed by majors last year. I'm just wondering how you guys are ensuring that you're able to find and sign the artists you want ahead of your competition. I'd love to hear your thoughts on those things. Thanks. Thanks, Ben. Let me start first with kind of how we see the shape of the world. Our revenue falls into what I would call four buckets. The first is, I'm going to put aside for the moment physical and touring-related revenue and talk about really digital. In the four buckets, we've got the traditional streaming, and we see, as Eric has said, a lot of runway, both with the established services in the more mature markets as well as emerging markets. The second bucket are really the social platforms. Facebook, Instagram, Twitter, they are using more and more music, not because they are pushing it, but because their users are pulling it. With respect to the social platforms, we continue to shape and/or reshape our deals based upon how mature they are relative to their growth curve and what support we believe they need from us to blossom into very substantial sources of revenue. I think as we mentioned to people during our IPO, that with startups, we typically give breaks in exchange for futures. So far, that approach has worked very well for us. The third bucket are what I would call these interactive business models. You've got Fortnite, you've got Roblox, you've got, in certain respects, some of the fitness models. We see ourselves as being part of those universes or metaverses, where we establish ourselves and our business as an integral part of those universes. Roblox, in particular, has a very interesting model where you can create your own business, your own world, in our case, our own music entertainment world, inside of their metaverse. Our intent is to continue to work within these interactive digital worlds to create a strong presence for the Warner Music Group, where we are able, whether it be on a transaction or a sharing basis, able to work with them not only to optimize our revenue but help them build their models. The fourth bucket is frankly all other. Those are new models and new opportunities that are literally emerging day in and day out. I can't tell you yet exactly how we're going to handle them. What we do know is that we see a constant stream of opportunities to both partner with and to invest in for the foreseeable future, and we plan on continuing to do that. With TikTok, specifically, we have a very close relationship. One of our recent acquisitions, IMGN, was recently named as one of their top 5 creators. We have very good relationships with the collective known as influencers on TikTok and with people that utilize our music. In fact, you may have seen, I don't know, a month or two ago, that "Dreams," it's a 40-year-old song, and it was used on TikTok and came back into the top 10 on radio and the top 10 on streaming services. We work through our labels and through our affiliates, our local affiliates around the globe to ensure that we have a strong relationship, not only with the service itself, but the creators and developers on those services that wish to utilize our music, and we wish to utilize their talent. Hopefully that answers your question. Yes. Thank you. Even I heard of the "Dreams" thing on TikTok. That's how big it was. Yeah. Thank you for the color. Yeah. Thank you. Our next question comes from Heath Terry with Goldman Sachs. Your line is open. Great. Thank you very much. Steve, as we hopefully kind of come closer to the light at the end of the tunnel here, wondering how you're planning for Warner's position in live music. Is there work that can be done now, is being done now around preparing for the return of live events, sort of positioning your artists as best as possible, as we're kind of thinking about what the second half of 2021 could look like. How do you see this opportunity kind of playing out for Warner to get a faster start? Well, I actually see several things. First of all, I hope that the second half of calendar 2021, I hope that the vaccine has been broadly distributed. I hope that we get clarification on its efficacy rates relative to the new strains, and that businesses can open, and we can begin what I think is going to be a longer path to get back to some semblance of normalcy. What we are doing, Heath, in the interim is a couple things. Number one, we are taking advantage of live streaming to continue to promote our established and our emerging artists, and we're doing that with any number of digital streaming partners that are operating successfully in the live streaming world and in the virtual reality worlds. What we're continuing to do is work in a variety of ways to grow the fan bases for established and emerging artists. We obviously continue to roll forward plans for our live activities, our promotional touring. As you know, for our emerging talent, much of that relies on the opening of smaller venues. While we are hopeful that that's going to happen sooner as opposed to later, we also know that the way we schedule this and the way we return to live has to be carefully crafted so that our artists don't get lost in a traffic jam. Our label operators are looking at this on a regular basis because they know that when the gates do open, we have to be in the right lane, so to speak. What we also believe, and I think that Eric touched on this as well, is people's habits are changing, and we are looking to frankly capitalize on that by establishing a sound foundation in live streaming and working on establishing live foundations in these interactive worlds here. We're aware of it. We continue to roll forward our plans, we are looking at other ways in which, frankly, to capitalize on what's been, for the planet, broadly speaking, a horrendous situation. Great. No, thank you, Steve. I appreciate that. Thank you. Our next question comes from Jason Bazinet with Citi. Your line is open. This is maybe a dumb question, but I'm just going to ask it anyway. When you guys talked about EMP, I sort of thought of that as a bit of a sideshow. With this IMGN Media asset that you bought and your stake in, I think you have a stake in Roblox. I'm starting to think that we sort of are seeing the early outlines of a strategy to almost vertically integrate in a new way, not by buying a traditional streamer or anything like that. Is that the right way to think about how you're thinking about using your excess cash flow? Well, I think that you should look at it in a couple of ways, Jason. I got the name right, I hope. Yeah. I'm doing this on an iPhone, so sometimes it's a little scratchy. I guess you could look at our growth strategies in a couple of ways. The first is we're going to ensure that our core businesses, recorded music and music publishing, that we continue to build thoughtfully with the right financial discipline, those businesses. We intend on, over time, continuing to increase our A&R budgets and the related budgets of marketing and promotion. We also plan on enhancing the footprint of those businesses on the music publishing side, primarily through catalog acquisitions, on the recorded music side, primarily through the acquisition of going concerns or opening new offices. What streaming has shown us is that it is more important than ever in our core businesses to be global and not Anglo-centric. That's been one of our goals over the last eight or nine years, and we're going to continue to pursue that. Yeah. That's number one. Number two, some of the moves that we've made have to do with not only revenue diversification, but where we see the world of musical entertainment in the next five or 10 years, Jason. Yeah. Where we see the intersection of social, of gaming, of God knows everything else are in these metaverses where people come to them for any number of reasons, and we want to make music a far more compelling reason to come to these alternative worlds. Yeah. That is where we see much of the future, and we intend on investing in a future that we believe is figuratively and almost literally around the corner. Your observation is accurate. Okay. Thank you very much. Our next question comes from Brian Russo with Credit Suisse. Your line is open. Hi. Thanks for taking the question. This is a follow-up to a couple of the earlier questions, either for Steve or Eric. When you look at the impact the shutdown had on the subscription streaming in calendar 2020, it didn't look like the subscription piece was really negatively impacted. When the world sort of returns to concerts and live events, hopefully later this year, do you think we should expect to see the subscription streaming benefit at all? Maybe with the notion that you have a lot more new music coming and new concerts might encourage consumers to subscribe. Thank you. Well, I'm happy to help answer that. The return post-COVID for subscription streaming, we think the environment is growing solidly now. There are opportunities for that to grow, potentially. We could break it into developed markets and emerging markets. In developed markets, we continue to see subscriber growth. We think we're still relatively early innings, and there's ample room for subscriber growth. What we are starting to see with the DSPs is some experimentation with price increases, and we think as that, we hope and think there's a strong opportunity for that to gain traction. Whether it's Spotify, which has, in selected markets, increased the price of family plan or Amazon, and we hope other platforms looking at high resolution as a tier that can support increased pricing. We think that has the potential to be a positive impact on developed markets as their ARPU has the opportunity, which really has an increase in the past 10 years to go up. We think emerging markets are really just starting to find their stride. It is really very early days, and we think that the growth there has the potential to really accelerate. Granted, it'll be lower ARPU. However, those markets in the past were relatively light revenue contributors overall, that as subscription streaming and ad streaming find their way into emerging markets, really has an opportunity to be incremental growth at very high rates. We do think that subscription streaming and ad-supported streaming have an opportunity to really continue to grow strongly going forward using those combination of factors. Hopefully, that answers your question, Brian. Eric, just to follow up. I think in a prior call, you were talking about back half weighted this year in terms of your release schedule. A lot more artists are releasing. That's kind of what I was asking about. If you have a sort of like a push for lots of new releases, and the artists will support this by touring, fingers crossed, is that something that sort of moves the needle for the subscription streaming, or is it all just sort of more based on the overall number of subscribers and some of the other ARPU opportunities you talked about? It's a combination, Brian. Certainly, subscribers and ARPU are a huge part of the equation. Also, market share is. Market share can be driven through a combination of things. New releases and having a strong release schedule is part of the formula, continuing to mine our catalog and continuing to make sure that new audiences are discovering our catalog and continuing to keep that robust. Yes, as releases continue to come out and hopefully, we expect to have a strong release schedule, which we continue to work towards the second half of the year, we would obviously expect that and hope that drives streaming opportunities. Yep, we do think that is certainly something we're striving for. Terrific. Thank you. Thanks, Brian. Our next question comes from Rich Greenfield with LightShed. Your line is open. Hi. Thanks for taking it. I guess two questions. One, Stephen and the whole team, you've been talking so extensively about gaming. I haven't counted the number of times Metaverse has come up, but it's a lot. As you think about how much gaming has played into it, where does Twitch fall into this? I know that they've gotten, you all as an industry, gotten a lot harder on takedowns and sort of making sure that copyright is respected. Where are they in terms of licensing music from Warner Music? Is that a 2021 goal to get something larger done? The second, it's sort of a bigger, broader topic, but we're seeing all of the major subscription streaming platforms and even ad-supported streaming platforms, for that matter, get a lot more focused on podcasting. I've certainly seen podcasters start to integrate more and more premium audio content, music content into podcasts. Is that where the opportunity lies? Is it a risk that podcasts start to eat into music time spent? I guess just how do you look at the overall podcast equation, I guess, is the multilayered question as part two. Well, let me deal with Twitch first. I believe the industry is in deep conversations with Twitch about licensing, because you're right, there has been this kind of aggravated back and forth. I'm relatively confident that'll be resolved in 2021. What it does show is the utilization of music in the gaming world is a critical element to gaming. It provides the beat in the game, so to speak. I'm confident that that'll get resolved, and it'll get resolved to everybody's satisfaction. On podcasting, I get torn about podcasting. We do dozens upon dozens to podcasts at the operating level, and they are aired on Apple, they're aired on radio. They're aired on, I think we've got a deal with Spotify. They're aired on a number of services. I believe that people come to the streaming services primarily to listen to music and will listen to podcasts. Those who come for podcasts will also listen to music, and I believe that it will be beneficial in both directions. What I have seen is that podcasts have smaller Smaller followings. There are dozens upon dozens upon dozens of niches. People, at least the people I know, don't listen to the same podcast 5x, 10x, 15x, 20x, 30 x, which they will do with their favorite tracks of music. The way podcasting, at least again in my view, has to be serviced is with just ongoing levels of content to smaller crowds, and while we are doing that, providing content to these services and these narrow niches. Ultimately, I see them as a gateway, particularly as people use more and more music in podcasts, as a gateway to just listening to more music in general on a streaming rich. You think that ultimately podcasting can actually help be a way to introduce music to different audiences than just traditionally just listening to music as a starting point? Yeah. Absolutely. Look, if you think about all of the regular broadcast TV programs that used to introduce new music to the world, whether it's the contest, American Idol or The Voice or Glee, podcasts for some people will be a source of discovery. To the extent they like what they hear, that will lead them to listen to music that they discovered vis-a-vis the podcast and music that's similar, because it now gets curated on all of these services. I think the answer is yeah, that podcasting will benefit music. Thanks for the thoughtful answers. I really appreciate it. Thank you. Our last question comes from Jessica Reif Ehrlich with Bank of America. Your line is open. Thank you. Thanks. Two, I guess topics. One is streaming and the other is just artists or talent. On streaming, you kind of touched on this earlier. Spotify is testing price increases in seven markets, it's been going on for several months now. Have you seen anything in terms of changes in dynamics given the price changes? If it's successful, is there a way for you to incentivize other DSPs to follow on? Amazon has a different offer. Also, within streaming, where do you think you'll see meaningful growth going forward in terms of new markets? Spotify just launched in South Korea. Russia was one of their biggest launches, there's talk of DSPs going into Africa, which is a market I can imagine you guys monetized well in the past. Kind of switching gears, you mentioned in the press release as well as on the call a few times, your upcoming release schedule for new, and I think you mean new and established artists. Is there any color that you can give us in terms of visibility of what will be coming? Thank you. Well, Eric, let me make a couple comments, and you may want to chime in. Just about streaming broadly, and the monetization, Jessica. You know our view is that there's still an enormous gap between the monetization of eyeballs and the monetization of ears. Ultimately, we think that all of the streamers, as they add new features, new functionality, by way of example, you cited Amazon with their high res. You're right, Spotify is experimenting with price increases. Ultimately, we think that all of the services over time will increase prices. We encourage them to do this, and when we think about the tens of millions of tracks that people get for a few dollars a month, our expectations every day grow that the services will begin to raise prices for functionality and features. Spotify is experimenting. We hope they broaden that experiment relative to pricing. As we said, we think that there's a lot of runway still, not only in the more mature markets, but in emerging markets. As they launch in new markets. Even when they begin with free offerings, it exposes people to more and more music. You mentioned Russia. Well, in Russia, even before the advent of Spotify, there are a number of streamers that we and others have partnered with, and Russia is a nicely growing market. The same is true in South Korea. You mentioned Africa, where we have partnered with Africori, which is one of the largest music streamers and distributors in Africa. While these markets, by way of economics, don't look overly meaningful at the moment when you compare them to the U.S. or Japan or the U.K., they are growing. People are being exposed to curated music. People are being exposed to some of the world's greatest artists, both global artists as well as local artists. Our view is that while the circumference of the globe is only 25,000mi, with respect to the circumference of music, it's a lot more. That was streaming in new markets. What was your third question? Sorry, I was on mute. Well, first of all, on Spotify, have you seen any change in consumer behavior because of the price increases? My second question, or my last question, was more about your talent is such so important for you. In the press release as well as in the call, you guys have talked about your release schedule. Is there any color that you can give us or visibility for the rest of your on new or established artists? If I could just follow up on something you just said, Steve, very interesting. While it's true that local artists will drive part of the market in addition to the international artists, what about developing artists in, you said you want to be more global as time goes on, less Anglo. How about bringing those local artists to the Anglo markets? Well, all right. I will do that, and then Eric can talk about any change in behavior. We do that. We cross our artists, wherever we can and where we see the potential in both directions. By way of example, one of the most prominent Chinese artists, JJ Lin, in one of his latest albums in China, we featured our artists from the West and vice versa. We look for crossover opportunities, whenever we can, and we do it because one of the things we've observed, and I think we've mentioned this before, is global hits can come from anywhere and resonate everywhere. We're seeing more and more examples of that every day. We run our recorded music business in a way that not only are we global, but we're also very local. You'll see in the Grammy nominations, Burna Boy, who has put out, I don't know, I think maybe three or four albums now with Atlantic, is the first Nigerian homegrown artist to be nominated for a Grammy. We have successfully worked with him, because he's such a talented kid, to take him global, so to speak. We do see that, and we do actively work on that. We've taken Anitta from Brazil and blowing her up over all of South America, Central America, Mexico, the Iberian Peninsula, and other parts of the world. With respect to our schedule of releases, we typically don't give a forward look on that. I will just say that when Eric characterized it as a very strong release schedule from both our superstars and our emerging artists, he was spot on. Yep. Eric, do you want to comment on? Yep. Changes relative or behavioral changes? Yep. Well, I would say, I would be cautious in us characterizing how Spotify's consumers responded to their family plan rate increases. There are some things that we can say. One is we think this is a natural progression, that there'd be experimentation and getting data on how customers respond, and then using that data to determine, if, when, and how to continue a progression of rate increases. I think there's been some reports today that Spotify has raised the family plan prices in both Canada and France, additional markets. We think that's very encouraging, and indicative of continued momentum of rolling family plan increases to additional markets. We think there is momentum that is starting to pick up on price increases. You also asked how we're incentivizing. Look, we think our deals incentivize both sides to be supportive of rate increases. They're purely accretive. We are in constant discussions with the DSPs, not just when we are having negotiations and talking about what we see and what they see as opportunities, obviously price increase would be one vector we're having conversations. We are seeing some positive movement across DSPs in that direction, and we do think as some of the influential larger DSPs start to have positive feedback on their rate increases, that certainly will encourage others to follow suit. We don't control that happening, but we certainly are encouraging of it, and we're seeing early signs of what we think could be that movement directionally. Thank you. Great. Thank you both. Thanks, Jessica. Thank you. I'd now like to turn the call back over to Steve Cooper for closing remarks. Well, I want to thank everybody again for taking the time to join us today, and I just hope you all stay safe and stay sane. Thanks again, and we'll talk to you in a few months. Bye now. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.