Quantcast

WMG'S Q3: DIGITAL DELIVERS

Warner Music Group’s revenue grew 13.1% (15.5% in constant currency) in the quarter ended 6/30, the eighth consecutive quarter of growth for the company. While seeing increases in licensing and artist services, expanded-rights revenue and music publishing, digital revenue was the big winner in Q3 with a 30.2% spike.

Recorded Music’s digital revenue hit $448m in the quarter, a rise from $348m in the same period in 2016. Digital represented 58% of the recorded music’s total revenue of $770m; top sellers included Ed Sheeran, Bruno Mars, Gorillaz, Clean Bandit and Twice.

Streaming brought in $360m, up from 2016’s $227m, while downloads accounted for $88m, down from $121m. The company’s streaming income is just under $1b for the first nine months of the year. Physical was off only slightly, down to $163m from $178m in Q3 2016.

For WMG overall, digital revenue grew 30.2% (33% in constant currency), and represented 54.1% of total revenue, compared to 47% in the prior-year quarter. This is the second consecutive quarter where digital revenue exceeded 50% of the company’s total revenue.

“Our goal is to beat market trends,” Warner Music Group CEO Steve Cooper said on a conference call to discuss the results. “There are many metrics of success…and we’re delivering across the board, taking the necessary steps to (stay ahead of the industry) and being driven by our own strategy.”

As he has said in the past, Cooper is bullish on voice activated technology as a key to growing subscriber services, which are now used by 2% of the world’s population and 5% of all smartphone owners. He projected, cautiously, that it’s “not an unrealistic expectation” for those figures to reach double digits.

WMG’s operating income increased to $51m, compared to $45m in the prior-year quarter, as a result of higher revenue.

“I’m proud of our team for delivering such strong results, particularly against difficult comparisons in the prior-year quarter,” said EVP/CFO Eric Levin. “I’m confident that 2017 will be another strong year.”

Licensing revenue, up a pinch to $66m, owed to increased sync activity; artist services and expanded-rights revenue held steady at $93m from higher merchandising and ticketing revenue in the U.S.

Music publishing’s revenue rose 11.9% (14.5% in constant currency) to $150m thanks largely to a rise in digital. The unit’s operating income was $6m, flat with the prior-year quarter.

Publishing growth, says Cooper, owes to Jon Platt and his management team’s A&R strategy over the last two years plus the fact that payment on publishing is reflection of earlier growth elsewhere as it lags behind recorded music.

Per Len Blavatnik's explicit instructions, the earnings report was served on a bed of caviar.

UMG BROADENS SPOTIFY OFFERINGS
Sir Lucian and Daniel are in harmony. (3/28a)
THE COUNT: COLDPLAY IS HOT, COUNTRY'S COOKIN' IN THE U.K.
The latest tidbits from the bustling live sector (3/28a)
YTD MARKET SHARE
Zeroing in on the elite teams (3/28a)
TRUST IN THE TOP 20
Hip-hop is no longer hibernating. (3/28a)
SONG REVENUE:
A STYLISTIC STEW
MC, divas and singer-songwriters rub elbows. (3/28a)
THE NEW UMG
Gosh, we hope there are more press releases.
TIKTOK BANNED!
Unless the Senate manages to make this whole thing go away, that is.
THE NEW HUGE COUNTRY ACT
No, not that one.
TRUMP'S CAMPAIGN PLAYLIST
Now 100% unlicensed!
 Email

 First Name

 Last Name

 Company

 Country
CAPTCHA code
Captcha: (type the characters above)