Business

What's Next for the Music Streaming Biz? Warner Chief Digital Officer Oana Ruxandra Shares a Road Map

Oana Ruxandra
Mackenzie Stroh

Oana Ruxandra photographed on Sept. 8, 2020 in New York.

"To get on a bit of a soapbox, I’m really excited about the future."

Oana Ruxandra moved to the United States from Romania with her family as a child, and some of her important early memories of this country involve music. “I couldn’t speak any English, but I had started playing the violin when I was 4, and when I got here, I really related to people through music,” recalls Ruxandra, now Warner Music Group’s chief digital officer/executive vp business development, in her Manhattan apartment. She played in orchestras in school and started listening to louder rock, but “then I heard Leonard Cohen, and that changed what I listened to.”

Ruxandra worked for music companies while studying at Columbia University, then worked in finance, which included a stint as a quantitative analyst at BlackRock. (Her first job, at 14, was as a “gamemaster” at a laser tag center, and she’s still an avid video gamer; Animal Crossing is a current favorite.) After a few years, she went to Wharton business school at the University of Pennsylvania and, she says, “started stalking the person who ended up hiring me at Warner, former digital strategy executive Stephen Bryan, who now runs label relations at YouTube.” She went to Universal in 2016, then last year returned to Warner, where she oversees negotiations with digital business partners, from established services like Spotify and Apple Music to platforms like Twitch and TikTok. Some of those services have been at odds with the music industry since they don’t yet license content, but Ruxandra believes they represent an important part of the future of the business that will keep growing once subscriber numbers for traditional streaming settle.

“I’m really passionate about ensuring that artists can survive and thrive,” says Ruxandra. “It’s especially important because music can truly change culture — it can change the world.”

Over the past few years, we’ve all been talking about how the music business has been on this path from a near-death experience to growth, which will continue for either a few more years or a few more decades. Where do you think we are in that process?
I look at this very positively because I’m focused on driving value with different streaming models. When people talk about streaming, it tends to be ad-supported streaming that has some limitations or subscription streaming with fewer limitations, and that’s not how I think about it. There will be growth there, but there are more people enjoying music in more ways and on more platforms. There are different forms of streaming arising every day, and the focus of my team is capturing value there.

You’re talking about services like TikTok and Twitch?
Yes. I think streaming encompasses anything from fitness shows to social platforms. The idea that all-you-can-eat music streaming is the last way music is going to be consumed is a very antiquated way of thinking. Technology continues to evolve, artists continue to evolve, people continue to evolve.

Mackenzie Stroh
“I grew up on punk and got into Britpop,” says Ruxandra. “I love Blur.”

So is that the next stage in the growth of the music business — these services that incorporate music in other media products? Like Peloton, for example?
To get on a bit of a soapbox, I’m really excited about the future: I think you’ll see a hyper-reality metaverse that runs on headset devices and has content and experiences and a fully functioning economy. That’s the world Warner is envisioning. And, obviously, today there are businesses like podcasting — Warner does an enormous amount of work in podcasting, some of it focused on music and some not. And social. And fitness. We have a great relationship with Peloton, but there’s a ton of other fitness companies out there. There’s a [virtual reality] fitness app that I just spent 30 minutes in — Supernatural — which offers the interaction of fitness and gaming. Virtual reality and fitness is going to be huge. Ultimately, everything is going toward gaming, and we want to make sure we’re capturing value within it. It’s the future of entertainment.

And you think these kinds of services will be additive to Spotify and Apple Music, not competitive?
That’s something we talk about, but no — I don’t think there’s going to be cannibalization. I think that there’s room for people to consume music in different ways — especially during COVID-19, since everyone is much more digital these days. The evolution of digital has exceeded, in two months, what we thought we were going to see in two years. Right now, there’s more and more consumption happening on TikTok, but we’re not seeing engagement dropping across other platforms.

Mackenzie Stroh
Audeze headphones, which “have great sound quality.”

People don’t tend to think of services like TikTok and Twitch as music streaming services because they’re used for other things. But isn’t it hard to negotiate with some of those companies, because they operate under the Digital Millennium Copyright Act (DMCA), so they can essentially use music until rights holders file takedown notices?
My focus is on ensuring that artists get value from the ways in which the audience interacts with their content — I hate to say “content” because music is art — so that they can make a living. It’s the services’ job to drive value, but often for the company and its investors, which sometimes means that they don’t want to pay as much as we think they should, and that kind of back-and-forth has always been there. Plenty of platforms that have more [user-generated content] say they don’t need music as much. The DMCA makes everything more complicated — and, quite frankly, sometimes impossible. It’s a law from decades ago [1998] that hasn’t been rethought, and it’s a massive part of the issue for artists.

You have a global position. What’s happening in other countries that Americans need to pay more attention to?
There are a lot of exciting things. What has been happening in the Asian markets in terms of livestreaming is far more evolved than what has been happening here. In the Anglo-American territories it has been more focused on sponsorship and advertising, but in Asia it’s more about consumers tipping and buying [virtual goods] — it’s about engaging with artists, where a lot of value and revenue is generated. It’s something we’ve been working to understand.

Mackenzie Stroh
Ruxandra’s violin, which she still plays as a hobby. “I’m definitely a behind-the-scenes person.”

You were Warner’s chief acquisition officer for a while, and you still do some work in that area. What do you look for in terms of companies to invest in?
We look for three things: How does Warner make a company better, in terms of competitive advantage? How can they make us better? And how could they help us increase revenue, cash flow or value?

You now also oversee Warner’s research and analysis team. What kinds of metrics are you looking at that the industry needs to think more about?
A lot of time and energy is spent on short-term metrics that are legacies — such as downloads and sales. What we really need to do is unlock an artist’s story to understand long-term metrics that are consumption-based so we can ensure that we, as the label, are driving value across an artist’s or songwriter’s career, from their new release to their catalog.

Mackenzie Stroh
A motorcycle helmet. “I sometimes ride in [New York’s] Hudson Valley.”

What would that look like?
We’re working on internal metrics to ensure that we’re tying the future of our labels to an artist’s career, as opposed to making money all at once, on an album’s release. It’s about driving value across a consumption life cycle, which can be longer — hopefully a lot longer. And that is what’s cool about the industry now. We have a whole team that’s working on that.

This article originally appeared in the September 19, 2020 issue of Billboard.