Streaming gets Warner Music Group back to $3b revenue after 5 years

Streaming music has become “paramount” to Warner Music Group’s (WMG) business, its CEO Steve Cooper reveals.

Figures for its financial year ending September 30 saw revenue from streaming for its recorded music division surge 74% (representing an additional $215 million) and an extra $15 million for its publishing division.

In comparison, revenue from downloads for the world’s third largest record company was down 14%, to the point streaming is only US$1 million less. “A remarkable shift,” said Cooper. Last financial year, downloads were contributing twice as much as streaming to the company. WMG did not reveal the actual figure for streaming.

Total digital revenue grew 10.9% to $1.2 billion and now represents 39.5% of all revenue (formerly 38%).

WMG’s total revenue rose 5.2% to $3.02 billion, the first time in five years that it was over $3 billion. Operating income was $19 million ($75 million the year before). Net loss grew from $194 million to $303 million.

Artist services and expanded rights — related to multi-rights artist contracts – is another growth area for WMG. It grew 23% to $332 million, now representing 13% of recorded music, mostly due to "strong concert promotion revenue in Europe due to the timing of tours."

Recorded music revenue grew to 5.6% to $2.5 billion. International sales were up by 11% to $1.58 billion while turnover from US recorded music fell 3% to $948 million. The Parlophone Label Group, which it acquired last year, contributed $322 million to the coffers.

Physical revenue declined 9% to $822 million.

Licensing revenue went up 21%, to $269 million.

The publishing division made $517 million, growing 3% in both the international and US divisions. Gains were attributed to increases in performance royalties, synchronisation revenue and digital revenue that more than offset a decline in mechanical royalties.

“We are proud of everything we accomplished this year,” said Cooper. “We had great success with artists at all stages of their careers, breaking amazing new talent as well as taking our established roster to new heights.

“At the same time we expanded our digital footprint, announced several groundbreaking partnerships and pushed into emerging markets, ensuring we are well positioned to capitalise on future growth opportunities as the industry evolves and streaming services achieve scale.”

For the fourth quarter alone, WMG revenue was $771 million (up from $764 million) and net loss was $24 million. Digital revenue continued to be driven by streaming, and represented a 9.9% rise to $301 million.