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STREAMING TOPS $500M AT WMG IN Q3

Warner Music Group revenue grew 10.4% in the 4/1 to 6/30 quarter driven by a 17% spike in streaming revenues, which topped half a billion dollars in the quarter.

Streaming accounted for $540m in WMG’s fiscal third quarter, up from $448m a year ago. Downloads were down to $44m from $71m. Digital revenue represented 61.2% of total revenue, compared to 60.1% in the prior-year quarter.

“To say that streaming is responsible for the recovery of our business is an oversimplification,” Warner Music Group CEO Steve Cooper said on a conference call with analysts and investors. 

“The sheer volume of music being released on these platforms is actually making it harder for great artists and songwriters to get noticed. In the streaming era, consumers have 50m tracks at their fingertips, growing at a rate of over 40,000 tracks per day. That’s why our recording and publishing businesses are more relevant than ever. We cut through the noise. Our A&R skills and marketing strategies are critical ingredients for any artist or songwriter who wants to build a successful global career.

“We provide the streaming services with a steady flow of great new music, while helping to empower start-ups, new business models, and entrepreneurs that benefit the creative community.  At the same time, we must ensure that music is appropriately valued to protect our artists’ and songwriters’ livelihoods.

“Getting that balance and compromise right with our global distributors is never easy—and it sometimes means making strategic decisions that don’t necessarily align with the choices our competitors are making.”

Licensing and artist services, expanded-rights revenue and growth in Music Publishing digital and synchronization revenue also contributed to the growth which was stymied by the declines physical music sales and performance and mechanical revenue on the publishing side.

Music Publishing revenue declined $12m (7.5%) to $147m, though it is only off 1% for the first nine months of the fiscal year.

Operating income was $58m compared to $28m in the prior-year quarter.  OIBDA was $124m, up 25.3% from $99m in the prior-year quarter.

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