Warner streaming revenues up 16% in last quarter, but overall recorded music revenues fell 0.8%

Warner Music Group‘s recorded music operation generated $958m in the three months to end of September, up 0.5% year-on-year but down 0.8% at constant currency.

Streaming made up more than two thirds (66.7%) of this $958m figure.

Recorded music streaming revenues at Warner in the quarter (calendar Q3, fiscal Q4) hit $639m, up 16.2% year-on-year.

Other categories of recorded music revenues at Warner were less robust, and clearly hurt by the impact of Covid-19.

Artist Services & Expanded Rights revenue stood at $98m in the three months, nearly half the size of the $171m that Warner posted in the prior-year quarter.

(Warner’s Artist Services & Expanded Rights revenue includes money generated from merchandising, touring, concert promotion, ticketing, sponsorship and fan clubs.)

Warner’s recorded music Licensing revenue (including sync and performance licensing) also fell YoY in the calendar Q3 quarter, down to $76m versus $80m in the prior-year quarter.

Physical music sales were near-flat at $105m, slightly up on the $103m posted in the same period of 2019.

And Downloads & Other Digital fell 18% YoY to $40m.

Warner Music Group’s recorded music results for the three months to end of September ($m)

Things get interesting with these numbers when you remove Licensing and ‘Artist Services & Expanded Rights’ revenues from proceedings – solely leaving us with Warner’s recorded music streaming plus physical and digital sales revenue, which cumulatively added up to $784m in calendar Q3.

Of this number, streaming’s $639m haul claimed a whopping 81.5% – with physical and digital music sales contributing less than a fifth of the total.

Warner said in an SEC filing today (November 23): “Digital revenue growth reflects the continuing shift to streaming, the company’s largest and fastest-growing source of revenue. The decline in artist services and expanded-rights revenue was due to tour postponements and cancellations and lower tour merchandise revenue resulting from COVID-related business disruption.”

It added: “The decline in licensing revenue reflects a decrease in broadcast fees and synchronization revenue from lower advertising, television and film deal activity due to the impact of COVID. Physical revenue reflects the continued shift to streaming, which was partially offset by strong releases in the quarter.”

Warner’s biggest revenue-generating artists in the period included Dua Lipa (pictured), Roddy Ricch,Tones and I, Aimyon and Cardi B.

Recorded Music operating income in the quarter was $108m, up from $57m in the prior-year quarter. OIBDA increased to $151m from $101m in the prior-year quarter.

Warner also today revealed its music publishing revenues (at subsidiary Warner Chappell Music) for the three months to end of September.

Overall publishing revenues in the quarter fell 2.3% YoY (or 3.4% at constant currency). Growth in digital revenue was more than offset by declines in performance, synchronization and mechanical revenue.

Digital revenue grew, which Warner said reflected “the continuing shift to streaming and timing of deals with digital service providers”.

The company added: “The decrease in synchronization revenue relates to decreases in advertising spend and licensing activity resulting from COVID-related business disruption. The decrease in mechanical revenue is due to COVID-related business disruption and the continuing shift to streaming. The decrease in performance revenue was primarily driven by COVID-related business disruption.”

Music Publishing operating income was $23 million compared to $25 million in the prior-year quarter. Music Publishing OIBDA decreased by $1 million or 2.3% to $43 million.

Warner Music Group’s music publishing results for the three months to end of September ($m)

Warner Music Group’s overall business (including recorded music, publishing and more) posted quarterly revenues of $1.126bn in the three months to end of September.

That was flat versus the $1.124bn posted in the same period of 2019.

What with Warner’s calendar Q3 standing as its fiscal Q4, Warner Music Group has also today posted its fiscal year results for the 12 months to end of September 2020.

Recorded music revenue declined 0.8% (or 0.2% in constant currency) year-on-year in the 12-month period, hitting $3.81bn.

Music publishing revenue increased 2.2% (or was up 3.1% in constant currency) year-on-year in the 12 months, hitting $657m.

And Warner Music Group’s overall revenue decreased 0.3% (or increased 0.4% in constant currency) in the period to $4.46bn.

“We’re proud of everything we’ve accomplished in the past year, despite the challenging conditions that the world has faced. We’re essentially flat against a record-breaking prior year and, during the quarter, we grew 11% on an as-reported basis, excluding the revenue streams most impacted by COVID,” said Steve Cooper, CEO, Warner Music Group.

“In this increasingly complex environment, where music is woven into every aspect of our lives, our creative expertise and global reach are more valuable than ever.”

Steve Cooper, Warner Music Group

“We’ve had huge successes from global megastars and local hitmakers, breakout sensations and long-time legends. Our streaming growth has stayed strong, and we’ve also seen an acceleration in a whole spectrum of emerging revenue streams such as social media, gaming, and in-home fitness.

“In this increasingly complex environment, where music is woven into every aspect of our lives, our creative expertise and global reach are more valuable than ever.”

Eric Levin, Executive Vice President and CFO, Warner Music Group, said: “Our results are underpinned by the continued momentum we are seeing in streaming and the operating leverage driven by our digital transformation and business optimization initiatives.

“As we look toward the future, we are confident in our long-term growth prospects, particularly as the areas of our business that have been most impacted by COVID return to normal.”Music Business Worldwide

Related Posts