According to the company’s fiscal Q2 (calendar Q1) results, WMG saw its quarterly global company-wide revenues reach USD $1.494 billion (across recorded music, music publishing, and other activities).
WMG noted in its filing with the SEC on Thursday (May 9) that “consistent with the prior quarter”, the company’s recorded music digital revenue growth was “unfavorably impacted” by the termination of its distribution agreement with BMG, which it said, resulted in $22 million less revenue compared to the prior-year quarter.
It also noted that there was a $4 million “unfavorable impact” within Recorded Music streaming revenue due to a renewal with one of the Company’s digital partners, which resulted in “upfront revenue recognition” in the prior quarter.
Excluding the BMG Termination and the Digital License Renewal, WMG’s total revenue was up 9% YoY at constant currency.
(Including the BMG Termination and the Digital License Renewal, total revenue was up 6.9% YoY at constant currency.
RECORDED MUSIC
Warner Music Group’s recorded music revenues were up 4.3% YoY at constant currency to $1.189 billion.
That growth was driven, according to WMG, by growth in digital and licensing revenue, and was “partially offset by lower physical and artist services and expanded-rights revenue”.
Excluding the impact from the BMG Termination and the Digital License Renewal detailed above, WMG’s recorded music revenue increased 6.7% YoY at constant currency.
Warner’s recorded music streaming revenue (including ad-supported and subscription) was up 11.1% YoY on a constant currency basis (adjusted for the impact of the BMG Termination and the Digital License Renewal) to $828 million (see below).
WMG also breaks that figure down in its balance sheet to highlight the performance of its subscription streaming and ad–supported streaming revenues, respectively.
The company’s revenues from recorded music subscription streaming reached $615 million in calendar Q1. Adjusted for the BMG Termination and the Digital License Renewal, revenues from recorded music subscription streaming were up 13.5% YoY at constant currency.
(Including the impact of the BMG Termination and the Digital License Renewal, WMG’s revenues from recorded music subscription streaming grew 8.8% YoY at constant currency).
WMG generated $213 million in ad-supported recorded music streaming revenues in calendar Q1, which was up 4.4% YoY at constant currency.
Major sellers during the quarter included Zach Bryan, Ed Sheeran, Jack Harlow and Green Day.
Meanwhile, WMG’s recorded music business generated $104 million from Licensing, which was up 5.1% YoYin constant currency, driven, according to WMG, by “an increase in copyright infringement settlements”.
Physical revenue decreased 6.7% YoY at constant currency to $111 million, which WMG said was “primarily driven by the timing of new releases”.
Artist services and expanded-rights revenue decreased 3.1% YoYat constant currency to $126 million primarily due “to lower merchandising revenue, partially offset by higher concert promotion revenue in France and Japan”, WMG said in its SEC filing on Thursday.
Music Publishing
Warner’s global music publishing division – Warner Chappell Music – saw its quarterly revenues increase by 18.6% YoYat constant currency to $306 million, driven by growth in digital, performance and synchronization revenue.
Music publishing streaming revenue increased 29.4% YoYat constant currency to $185 million, reflecting what WMG said was “the continued growth in streaming, the impact of digital deal renewals and continued investment in the Company’s publishing catalog”.
Performance revenue increased 18.2% YoYat constant currency to $52 million, due to “strong artist touring activity in Europe”.
Mechanical revenue decreased $1 million or 6% YoY at constant currency, primarily driven “by lower physical sales”.
Synchronization revenue grew 2.1% YoY at constant currency to $48 million, driven, according to WMG, “by the timing of copyright infringement settlements”.
WARNER’S CALENDAR Q1 2024 IN SUMMARY (% IN CONSTANT CURRENCY):
Warner Music Group’s overall revenues were up 6.9%YoY at constant currency to $1.494 billion in calendar Q1;
Excluding the BMG Termination and the Digital License Renewal detailed in WMG’s earnings release, total revenue was up 9% YoY on a constant currency basis.
Recorded music revenues were up 6.7% YoY on a constant currency basis to $1.189 billion;
Within that figure, recorded music streaming revenues were up 11.1% YoY at constant currency to $828 million;
Recorded music subscriptionstreaming revenues were up 13.5% YoY on a constant currency basis to $615 million.
Music publishing revenues – at Warner Chappell Music – were up 18.6% YoY at constant currency to $306 million.
WMG: PROFITABILITY IN CALENDAR Q1 2024
WMG’s net income stood at $96 million versus $37 million in the prior-year quarter.
Operating income stood at $119 million versus $124 million in the prior-year quarter.
The firm’s quarterly adjusted OIBDA was $312 million versus $286 million in the prior-year quarter, up 9% YoY at constant currency.
Commenting on the company’s latest set of results, Robert Kyncl, CEO of Warner Music Group, said: “This quarter we saw a healthy, dynamic mix of hits across a range of genres, geographies, and generations.”
Credit: Warner/press
“We are positioning WMG for long term growth and look forward to delivering successful music in the second half of 2024 and beyond.”
Robert Kyncl, Warner Music Group
Added Kyncl: “With our commitment to artist and songwriter development as our guiding principle, we continue to discover great talent, build sustainable careers, champion the value of music, and grow the catalog of tomorrow.
“We are positioning WMG for long-term growth and look forward to delivering successful music in the second half of 2024 and beyond.”
“Our performance in the quarter was driven by an acceleration in Recorded Music subscription streaming growth and continued momentum in Music Publishing.”
Bryan Castellani, Warner Music Group
Bryan Castellani, CFO, Warner Music Group added: “Our performance in the quarter was driven by an acceleration in Recorded Music subscription streaming growth and continued momentum in Music Publishing.
“Encouraged by the continued growth in engagement and value of music, we remain focused on delivering on our strategy and driving long-term shareholder value.”Music Business Worldwide
