Warner Music Group posts Q1 revenue growth
Warner Music Group Corp. (WMG) have recorded a fiscal first quarter growth of 8% to US$917 million for the period ended December 31 2016.
The label has also posted a 27.6% rise in digital revenue (30.2% in constant currency), representing 48.4% of revenue totaling $US444 million, compared to 41% in the prior-year quarter.
The strong revenue figures reflected growth in the Recorded Music business, including digital and artist services and expanded-rights revenue, as well as Music Publishing digital and synchronisation revenue.
“Our strong momentum continues with excellent first-quarter results including 11% constant-currency revenue growth on top of 11% growth in the prior-year quarter,” said Steve Cooper, Warner Music Group’s CEO.
He added: “While streaming continues to drive industry growth, we are outperforming the market thanks to extraordinary music from our artists coupled with first-class execution from our operators around the world.”
Eric Levin, Warner Music Group’s Executive Vice President and CFO was equally as pleased with the major’s first quarter results.
“We had another great quarter and I am very pleased with our revenue, OIBDA and cash flow performance. Our formula for sustainable growth is clearly working.”
However, despite all the signs pointing to a strong quarter across the board, WMG’s net income fell from US$28 million to US$24 million over the prior-year quarter, a surprising drop of 8.5%.
Warner has blamed the drop on a loss on extinguishment of debt and increased tax expense related to higher pre-tax income in the quarter and the absence of a deferred tax benefit which impacted the last quarter.
Both physical and digital sales saw drops in numbers, as expected. But this was largely offset by the steep increase in digital sales and the seemingly exponential growth of the streaming sector.
Popular Warner acts including Bruno Mars and Michael Bublé contributed strongly to Warner’s success, while twenty one pilots, the Hamilton original cast album and the Suicide Squad soundtrack album also helped to push overall sales.
With the impending release of arguably one of Warner’s most prolific artists, Ed Sheeran’s Divide, the label is in prime position to experience similar success in 2017. Co-released singles Shape Of You and Castle On The Hill have amassed unrivaled commercial digital sales and streaming numbers after only a month.
Last week, TMN reported that the singles smashed Spotify’s Day 1 streaming record with a joint total of 13 million global streams in the first 24 hours. The figure rose to 23.36 million in 48 hours, working out to half a million plays every hour.
The official release date for Divide is unconfirmed, with some reports suggesting the album could drop as early as next month.