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WMG'S Q1: A BILLION DOLLAR BABY

For the first time in more than 10 years, Warner Music Group’s quarterly revenue exceeded $1 billion. And once again, growth in digital, licensing and artist services and expanded-rights revenue was partially offset by a decline in physical revenue.

WMG’s revenue hit $1.045b in the first quarter of fiscal 2018, a 14% rise over the year prior. Adjusted net income, however, was down 36% to $18m.

Recorded Music operating income for the period ended 12/31 was $129m, up from $123 million in the prior-year quarter and operating margin was down 1.1% to 14.3%. Recorded Music revenue grew in all regions. 

Streaming brought in $404m in the quarter, a 23% rise over 2017’s Q1. Downloads grossed $77m, down from $91m a year ago.

In the 2017 calendar year, WMG’s streaming revenue hit $1.342b.

WMG CEO Steve Cooper touted the company's success at the Grammys and praised the expansion efforts of streaming services on a conference call with investors. He also noted that streaming can elongate the life of a hit album and that new versions of singles can lift an entire catalog. Guess we'll be seeing more of what Ed Sheeran and Bruno Mars have recently done. 

The division’s OIBDA rose to $173m though the margin declined 1.6% to 19.1% owing to increased compensation expense, more money spent on A&R and the impact of a legal settlement in the prior-year quarter. The company had a one-time $13m expense related to moves in Nashville and Burbank.

Cooper would not announce any upcoming releases, saying only that the labels have "a steady stream of great stuff, really great stuff."

Music Publishing revenue rose 11.7% in constant currency. Revenue grew in all segments—digital, performance, synchronization and mechanical. The division’s operating loss was $1m compared with a loss of $2m in the prior-year quarter. 

 

 

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