Warner Music Group‘s total quarterly recorded music revenues hit $933m in the three months to end of March – with impressive year-on-year growth driven by streaming.
That $933m figure was up 18% year-on-year (or 22.4% in constant currency), including a $51 million increase related to the acquisition of EMP, partially offset by a $24 million decrease related to concert promotion divestitures.
Streaming, obviously, was the big driver in this $124m year-on-year growth.
WMG’s recorded music streaming revenues were up 29.4% year-on-year to $537m.
Perhaps the most interesting thing about that number for Max Lousada and co: it just pipped Sony Music’s reported streaming revenues in the same quarter ($504m), although Sony’s total recorded music sales, across all formats, were bigger than Warner’s, at $946m. (Another important distinction: Sony does not report gross sales of its distributed labels at The Orchard – instead only counting its net revenues, ie. the money The Orchard charges these labels for services, as opposed to total collections. It’s therefore very likely that, with this gross money included, Sony’s streaming revenues would have been higher than WMG’s.)
Streaming revenues ($537m) therefore made up 57.6% of Warner’s overall quarterly recorded music sales in calendar Q1 (Warner’s fiscal Q2).
Another standout stat: Warner’s streaming revenues in the six months to end of March (ie. the previous two quarters) topped $1bn, at $1.039bn.
The firm’s major sellers in the quarter included K-Pop act TWICE (pictured), as well as Meek Mill, The Greatest Showman soundtrack, Ed Sheeran and Cardi B.
WMG’s recorded Music operating income was $134 million in the quarter, up 67.5% from $80 million in the prior-year quarter.
Operating margin was up 4.3% to 14.4% versus 10.1% in the prior-year quarter.
Music publishing revenues at Warner/Chappell in the quarter were somewhat less impressive.
W/C’s sales declined $16 million or 9.2% (6.0% in constant currency) YoY, standing at $158m.
Revenue grew in digital due to the ongoing shift to streaming, but declined in performance, mechanical and synchronization.
The decline in performance revenue was ‘driven by lower market share and loss of administration rights in certain catalogs’, according to WMG.
The decline in mechanical revenue, which only relates to physical sales, was due to the ongoing shift to streaming. Synchronization revenue declined due to lower activity.
Music Publishing operating income was $27 million compared with $41 million in the prior-year quarter. Operating margin declined to 17.1% from 23.6%.
In term of WMG’s overall business – counting both recorded music and publishing – quarterly revenues grew 13.2% (or 17.6% in constant currency) year-on-year to $1.09bn.
Growth in Recorded Music digital and artist services and expanded-rights revenue and growth in Music Publishing digital revenue were partially offset by a decline in Recorded Music physical and licensing revenue and Music Publishing mechanical, performance and synchronization revenue.
WMG’s operating income was $122 million compared to $83 million in the prior-year quarter. OIBDA was $191 million, up 25.7% from $152 million in the prior-year quarter and OIBDA margin increased 1.7 percentage points to 17.5% from 15.8% in the prior-year quarter.
“Our sustained investment in our artists and songwriters, our artist services business and our world-class operators, are delivering great results.”
Steve Cooper, WMG
Net income was $67 million compared to a net loss of $1 million in the prior-year quarter, while adjusted net income was $75 million compared to $28 million in the prior-year quarter.
“Our second-quarter results were strong,” said Steve Cooper, Warner Music Group’s CEO. “Our sustained investment in our artists and songwriters, our artist services business and our world-class operators, are delivering great results.”
“Revenue and OIBDA were both up double-digits,” added Eric Levin, Warner Music Group’s Executive Vice President and CFO. “Our cash position remains strong, with $470 million on the balance sheet at quarter-end.”Music Business Worldwide