Steve Cooper reveals the next frontier for Warner Music Group
With two strong back-to-back quarters, double-digit revenue growth in recorded music and publishing, and a return to black, Warner Music Group (WMG) CEO Steve Cooper is being bullish about future steps.
“We’re focused on maximising our artists’ and songwriters’ reach and revenue across all fandom touchpoints,” he said in an earnings call after release of Warner’s Q2 financials, ending March 31.
“Whether that’s a snippet on social media, a soundtrack to an in-home workout, a live performance in a metaverse, or an NFT digital collectible… these points show how the music ecosystem is broadening and deepening its relationship with people everywhere.”
The most recent example of Warner’s artist-to-fan connecting initiatives was earlier this week, with an alliance and investment in Los Angeles-based virtual entertainment firm Wave.
Through broadcast technology and real-time gaming graphics, artists become digital avatars in a virtual world, in which they livestream concerts for fans to watch and interact with.
“Through this partnership, Wave will collaborate with WMG to develop virtual performances, experiences, and monetisation opportunities for our global roster,” Cooper expanded.
“This includes exploring new forms of ticketing, sponsorship, and in-show interactions.”
Warner has been working already on events to come to light in 2022.
“We were early to see that music would be fertile ground for digital collectibles,” the Warner chief added.
“In 2019, we made an investment in [blockchain technology company] Dapper Labs, the creators of NBA Top Shot.
“Last September, we began to experiment in this market collaborating with Apple to release two NFT CryptoKitties inspired by Warner Records rock band, Muse.”
Three months ago, Warner pumped an eight-figure sum into social gaming platform Roblox, after investing in virtual artist record label Spirit Bomb which makes pop and DJ identities from animated characters.
Another new alliance, announced April 30, was with the world’s largest avatar technology company, Genies.
It will bring Warner artists to life as avatars, with the reasoning that “cultural icons and figures are some of the most expressive people on Earth and they should not be constrained by real world limitations,” said Genies CEO Akash Nigam.
In a new revenue stream in merchandising, artists will sell limited edition digital wearables – like clothing, accessories, and tattoos – to their fans’ Genies avatars to memorialise key life-defining moments such as song or album releases.
Cooper told financial writers: “Our goal is to develop authentic, quality, and environmentally conscious products that build long-term fandom relationships.
“While it’s still early days for this space, we’re enthusiastic about its potential.”
Cooper noted how opening offices in India, Vietnam, Peru and Turkey and alliances with China’s Tencent, Russia’s Zhara Music and Rotana in the Middle East gave Warner a wider reach of consumers and artists.
The Q2 figures showed the group’s growing diversity. Net income was US$117 million compared to a loss of $74 million in Q2 2020.
Revenue for the quarter grew to $1.25 billion from $1.07 billion last year. Recorded music had a 16.8% rise to $1.06 billion and publishing (Warner Chappell) was up 15.7% to $192 million.
Streaming continued to grow 23.2% to $722 million, while strong new and catalogue demand for vinyl releases saw physical revenue bump up 25.5% to $118 million.
Revenue growth in digital and synchronisation was partially offset by COVID-related drops in performance and mechanical royalties.
Top sellers included Megan Thee Stallion, Dua Lipa, Michael Bublé, Ed Sheeran, Ava Max, the Hamilton cast recording, Roddy Ricch and Japan’s Yellow Monkey.
“Our success was driven by chart-topping new releases from our incredible artists and songwriters, as well as bold and imaginative execution from our world-class operators,” Cooper concluded.
“We’re excited about the rest of year, as we have a fantastic slate of new music coming from established superstars and emerging talent.”