Warner Music Group revenues rise, but losses widen

Warner Music Group posted a rise in revenue throughout 2013 to US$2.87 billion, compared to $.2.78 billion last year. But its losses widened from $112 million to $198 million.

During 2013, recorded music’s digital revenue grew to $997 million from $865 million, an increase of 15.3%. Meanwhile, physical music sales fell 7.2% to $900 million from $970 million. Digital revenue across the whole Group hit $1.1 billion compared to $925 million last year.

CEO Stephen Cooper said that digital streaming is growing while downloads dropped. “We see streaming growth as a great opportunity, not a cause of concern,” he said at a media conference. He said that many consumers were turning to paid subscriptions after six months of free trial.

At its publishing arm Warner/Chappell Music, revenue fell 2.7% to $503 million from $518 million in 2012. Performance revenue was down to $197 million from $200 million; mechanical dropped to $113 million from $128 million; and synchronisation fell to $98 million from $111 million.  However, Warner/Chappell’s digital revenue grew 25.8% to $83 million from $66 million.

Cooper called 2013 “a year of significant accomplishment at Warner Music Group. We intensified our focus on signing and developing extraordinary artists, we executed well on our digital strategy and we acquired and have been successfully integrating Parlophone Label Group.”

Aside from the Parlophone acquisition, which Cooper expects to deliver cost savings and other synergies of $70 million over two years, Warner also launched an ambitious classical music strategy. “Using the former EMI Classics and Virgin Classics as its foundation, we are innovating around the catalog while continuing to sign top classical artists.”

Warner also announced the results of its final quarter ending September 30. It posted a 4.5% rise in revenue to $764 million and a net loss of $57 million. Much of the revenue growth was due to the addition of Parlophone Records from July 1. Without Parlophone’s contribution, Warner’s revenue would have been about $704 million, a 3.7% from the 2012 last quarter. Digital music, up 18% to $262 million, represented 40.7% of total recorded music revenue. This was up from 36.6% in fourth quarter 2012.  Music publishing revenue fell 4.5% to $126 million.