‘Ten years ago, DSPs were the cornerstone of establishing a new business model. What’s the next evolution of this?’

MBW’s Inspiring Women series profiles female executives who have risen through the ranks of the business, highlighting their career journey – from their professional breakthrough to the senior responsibilities they now fulfill. Inspiring Women is supported by Virgin Music Group.

Carletta Higginson, who is today Chief Digital Officer at Warner Music Group, has been in the thick of the biggest transformations the music industry has grappled with over the last two decades.

She started her music career at law firm Pryor Cashman in New York, working on copyright infringement cases. After that, Higginson transitioned to Jenner & Block, where she spent nearly eight years representing music rights holders at the height of digital piracy.

Higginson’s next stop was on the other side of the negotiating table, where she was part of the solution, building out Google and YouTube’s licensed music streaming offerings.

“It was really exciting to be there and to think strategically about what the licensing framework should look like,” Higginson remembers. “I saw, sitting on that side, that YouTube was committed to doing that right.”

It was the age of the much-discussed ‘value gap’, when YouTube was constantly berated for not paying out enough revenue to the music industry for the volume of consumption that took place on its platform. Then, in 2016, music industry veteran Lyor Cohen joined as Global Head of Music and helped change the narrative.

Higginson continues: “We started to see revenue build and got to billions of dollars being paid out annually to the industry. Having come from a place where the revenue for the music industry had declined so rapidly, to then have the ability to work on a framework to build revenue back out for the industry, felt really rewarding.”

In 2023 Higginson joined Warner, where she is tasked with driving revenue for artists and songwriters across the company’s recorded music and publishing businesses.

She works on deals in the digital space, which spans streaming services, social media, gaming and fitness platforms, as well as the burgeoning AI market.

Higginson says she landed in music accidentally. As the daughter of immigrants — her dad is from Barbados and mom from the Philippines — she was expected to be a doctor or lawyer.

After first going down the doctor route, she realized it wasn’t what she wanted to do, so pursued law instead at Columbia Law School. After joining Pryor Cashman, she fell in love with the business.

She says: “We were analyzing lyrics to songs, working with musicologists, figuring out whether they were substantially similar to one another. It was fascinating. It was intellectual, but it was music. We were defending artists in depositions, we were defending the music companies, and it was a very exciting and interesting space.”

Higginson’s career path followed her natural fandom of music, which was cultivated while growing up in a house that was filled with it. “My dad was a huge fan of jazz, bossa nova and funk and soul. He had been a DJ in his college years, so there was always music flowing through my household,” Higginson says.

“When I first got the opportunity to make a career out of music, one that I wouldn’t necessarily have imagined, that was super exciting for me.”

“I also had two older sisters and their journey was within hip hop, reggae and soca, so I got a culmination of all of these different influences. When I first got the opportunity to make a career out of music, one that I wouldn’t necessarily have imagined, and access this world from a different angle, that was super exciting for me.”

Here, we chat to Higginson about the future evolution of music streaming, AI, lessons learned across her career, and more…

Having spent considerable time on the DSP side of the business, is there anything you’d like to see from DSPs today that would better support the music industry and its growth?

Ten years ago, DSPs were the cornerstone in terms of establishing a new business model with music rights holders and figuring out how we continue to have long-term sustainable growth for the music industry in a different form than we have historically. What’s the next evolution of this? It is incumbent on DSPs to work together with music rights holders to establish the framework for the next 10 years.

“There’s a lot that could be done when we think about price optimization.”

There’s a lot that could be done when we think about price optimization. While there might be a slowing of streaming subscriber growth in mature markets, there’s still so much opportunity from a pricing perspective. The approach in markets where you reach saturation may look different to how it will in markets where there is still significant opportunity for continued subscription and subscriber growth.

The DSPs should be working with the industry to ensure the right incentives are in place so they are continuing to grow the pie and grow music’s value in the pie. There is a lot of collaboration that DSPs can have with each other and the industry, where we are working together in a way that helps them improve their margins, but helps music continue to grow within that.

Can you talk a little more about what the next decade might look like?

Our new deal with Spotify is a big step forward in continuing to grow the value of music, bringing added benefits for artists, songwriters, and the industry as whole, but there is a lot of room for continued price uplifts. It was 10 years or so before Spotify did their first uplift and they did it by $1. That was great but there’s more that can be done in that space.

We’re acutely aware of the need for DSPs to find margin, but we want to ensure they’re not finding margin at the expense of music, and that we’re approaching this in a way where music is continuing to participate in those incremental increases that are happening because of bundling, which is one area that we’ve seen services head into.

Bundling, generally speaking, is something that’s healthy for the ecosystem. It means lower subscriber acquisition costs and longer retention. This could be a good thing for the industry if we strike the right economics and the right structure.

We also know that there are a lot of markets where there isn’t softening; there’s growth and potential for growth from a subscriber perspective. So how do we think about those markets as related to the ones where there is this maturation? How do we think about changing those economics? How do we think about ad-supported? It was critical from a revenue perspective in helping to build out — not everybody has a credit card to put down or is going to be a subscriber. What are the right economics from that perspective at this stage?

In your role at Warner, where do you see the most exciting developments happening, especially when it comes to revenue-earning opportunities for artists and songwriters?

One of the really exciting things is that we are at another pivotal juncture as we think long-term about our deal structures.

I think back to when I first went over to YouTube, when we had the opportunity to transform and think through the economics and licensing structure. As we consider our bigger deals, and determine the right economic structure for them, it’s a very interesting space to explore, as are the opportunities emerging in AI. This is a new area with no guidebook, but we have the experience of navigating UGC content, which was all new at the time.

How do we apply some of those principles and learnings we’ve had there to this opportunity in the AI space, while continuing to protect the artist and songwriter’s name, image, likeness and voice? It’s about embracing the potential of it while also protecting our artists and songwriters, and those who want to participate, and ensuring that they can maintain their livelihoods.

If you can pinpoint them, what are the biggest lessons you’ve learned across your career?

One of them is the importance of sponsorship and mentorship. Throughout my career, I’ve had amazing mentors, people that I would pick up the phone to and who would help brainstorm with me about different opportunities or ways to navigate certain situations. Having the ability to have those different perspectives has been critical.

Then there’s the sponsorship aspect. I’ve had various sponsors in my career journey and those sponsors, oftentimes, did not look like me. But they provided and helped create opportunities for me and I wouldn’t be where I am today without having that. They had faith and trust to put me in those places and I realize how valuable that is.

I have tried, throughout my career, to be that sponsor and mentor for others. It’s so critical to have that as we think about advancement and having those opportunities to be in elevated positions. Sometimes it really does take a sponsorship relationship for that to happen.

What’s the best career-related advice that you’ve been given and who did that come from?

One of the things that I think about often, and it came from Lyor Cohen, is to hire people who are going to help you go home earlier at night so that you can be with your family or have your time.

I’ve always interpreted that to be about hiring the best possible people for a role who are going to take the burden off of you, who can step into your shoes, and don’t be threatened by who you’re bringing in.

Thinking about it from the other angle, I should be that for whoever is hiring me. I think that’s a good way to think about things. It’s helped me in my hiring when I build teams to have the strongest team possible.

What are the biggest challenges that you’re facing in your work today?

One of the biggest challenges is that the industry and the landscape is evolving as we think about streaming and growth.

As that happens, we have to rethink how we’ve done business in the past. It’s been great to date, and now we have to think about how we want to tweak things going forward. Whether that’s from a structural perspective in terms of the economics of our deals, or embracing new technology and figuring out how we incorporate it and what that looks like with respect to our deals, artists and songwriters.

“We’re creating something new, this isn’t about a rinse and repeat of what we’ve done in the past. This is about how we think about transformation and how we take our partners along on that journey.”

That’s a challenging place to be in because we’re creating something new, this isn’t about a rinse and repeat of what we’ve done in the past. This is about how we think about transformation and how we take our partners along on that journey.

If you had the power, what would you change about the music industry and why?

Sitting here, particularly in this seat, I would love to see more diversity across leadership in the industry. It is critical that leadership within the industry reflects the fan base, the artists, songwriters and companies as a whole.

Do you have any ideas on how to increase the diversity of music companies beyond what has already been done?

It requires really intentional behavior from leaders at the top. The importance of it, the requirement for it, needs to come from top down.

It’s about setting up the right incentives internally within these companies, and ensuring that, if you’re interviewing for a role, you’re thinking very broadly about the candidates.

A lot of times, people just wouldn’t necessarily have the opportunity. If you think very myopically about background and you know what you want, you may not be getting as diverse of a panel that’s there. It requires a lot more intentionality than may currently be in existence.

If you could go back to the beginning of your career and tell yourself one thing, what would it be?

I would say that your career is a long journey and you shouldn’t get too focused on ‘I want this particular role’, or ‘I want to do this particular thing’. You’ve got to be open to going in different areas, places and spaces and being prepared for those opportunities when they’re presented.

Sometimes, things are about timing and sometimes, things are about opportunities that are presented. Keep a really open mind about where your career might take you and ensure that you’re enjoying the ride at each of those different stages along the way.

Virgin Music Group is the global independent music division of Universal Music Group, which brings together UMG’s label and artist service businesses including Virgin and Ingrooves.

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