PUBLISHING DRIVES WMG'S $1.43B QUARTER

Warner Music Group’s revenue was up 12.1% in constant currency to $1.43b in the quarter that ended 6/30 with significant spikes in music publishing, artist services and expanded-rights cash.

Recorded-music revenue of $1.19b was up 8.5% in constant currency thanks to a 56% spike in artist services and expanded-rights revenue reflecting an increase in concert-promotion income.

Driven by growth in digital, performance and synchronization revenue, music publishing was up 34.6% to $245m. In a call with analysts, CEO Steve Cooper singled out Warner Chappell’s recent signings, success out of its Nashville office and a new deal with Kevin Hart’s company.

The strong quarter, Q3 in WMG’s fiscal year, for publishing helped total streaming revenue increase by 6.5% in constant currency as digital revenue came in at just under a billion dollars ($944m).

Recorded-music’s streaming-revenue pipeline felt the impact of a new deal with one of the company’s digital partners and an $11m catch-up payment from another. Growth in the quarter was unfavorably affected by foreign currency exchange rates as the U.S. dollar strengthened.

“We delivered solid double-digit growth on a constant-currency basis, even against the backdrop of a slowdown in the advertising market and some one-time items affecting year-over-year comparisons,” Cooper said, telling analysts that WMG “had to deal with significant [foreign exchange rate] headwinds" in the quarter and that several significant releases were moved to the July-September quarter. He expects an “uplift” in the next quarter from new music by Cardi B, Lizzo, Panic! at the Disco and several international artists, plus revenue generated by a new deal with Meta and some legal settlements that will add $25m to OBITDA. “In June, we saw the beginning of a new wave of amazing releases and we’re looking forward to a strong end to our fiscal year," Cooper affirmed. "Long term, we have the scale to best capitalize on trends in artist development and the agility and resources to continue to propel the globalization and diversification of our business.”

Regarding the search for a new CEO, he informed listeners that he is “actively in the loop and expects there will be an overlap with the transition.” The key, he said, is to have a “well-thought-out and orderly” plan that allows WMG to “focus on the business without missing a beat.”