WMG INCOME UP 2.4% IN Q1
Revenue at Warner Music Group grew 2.4% for the quarter ending Dec. 31, hitting $737m, a growth attributed to spikes in digital, licensing and artist services on the recorded music side and digital revenue from publishing. Net income was $28 million compared to a net loss of $41 million in the prior-year quarter.
Saying goodbye to the rights to “Happy Birthday,” among other factors, led to a 2.5% dip at music publishing.
Digital revenue grew 18%, and represented 41% of total revenue, compared to 35.6% in the prior-year quarter. Streaming revenue growth more than offset declines in download revenue.
“Subscription streaming is a major driver of our growth and streaming revenue remains on a trajectory to become our largest revenue source,” Warner Music Group’s CEO Stephen Cooper said in making the announcement of first quarter results.
During the call with investors, Cooper acknowledged that not all monies received from streaming go to artists, and that should WMG sell its Spotify shares—it owns about 2%—proceeds would be shared with artists.
“There are equity stakes in some streaming services for which we have not paid,” he said. “Although none of these equity stakes have been monetized since we implemented our breakage policy, today we are confirming that in the event we do receive cash proceeds from the sale of these equity stakes, we will also share this revenue with our artists on the same basis as we share revenue from actual usage and digital breakage.”
For the quarter, which, of course included the holiday season, recorded-music operating income was $98 million up from $52 million in the prior-year quarter.
Music publishing's revenue decline owed to currency-related declines in performance and synchronization revenue as well as declines in mechanical revenue reflecting the ongoing shift to digital. The department was down $13 million compared with $0 in the prior-year quarter, a result of expenses related to the “Happy Birthday” settlement, revenue decline, revenue mix, severance costs and timing of distributions in the prior-year quarter.
