Warner Music posts record quarter as publishing & digital revenues soar
Warner Music Group set a record for quarterly revenue when it generated US$1.614 billion (AU$2.26 billion) in Q4, ending December 31.
The figure for the quarter (which is also the company’s fiscal Q1) was up 20.9% year-on-year from US$1.335 billion from the same quarter in 2020.
It was driven by a 21% bounce in digital revenue across recorded music and music publishing.
Warner noted that the quarter included an additional week, which primarily impacted on recording streaming. The results also reflected the impact of a new deal with an unnamed digital partner.
Digital made up 62.1% of total revenue compared to 61.8% in Q4 2020, helped by more streams in emerging platforms.
Aside from the surge in streaming (to $836 million) and new releases, the rise in recorded music was due to a 21% rising demand for the physical format ($195 million), especially for vinyl.
Ed Sheeran, Coldplay, Dua Lipa and Silk Sonic lead album sales in the quarter.
Dua Lipa’s ‘Levitating’ was the biggest track in the US in 2021.
Licensing revenue increased 11.3% to $89 million which Warner Music attributed to “higher synchronisation and other licensing revenue, as businesses continued to recover from COVID disruption”.
The publishing division was up 30.9%, while it was a 19% growth for recorded music.
Ed Sheeran
The monetary escalation in the music publishing division Warner Chappell Music to $229 million was attributed to 34.3% in digital with streaming (up 37.2% to $129 million) becoming more significant as new platforms emerged and new digital deals kicked in.
Publishing sync’s increase to $42 million (from $33 million in Q4 2020) was attributed to “higher television, motion picture and commercial income and COVID disruption in the prior-year quarter”.
Also recovering were artist services and expanded-rights revenue (up 28.9% to $232 million) from growth in merchandising and concert promotion revenue.
Performance revenue increased from $30 million in the prior year quarter, to $38 million “as bars, restaurants, concerts and live events continued to recover from COVID disruption”.
The company’s greater physical sales was attributed to the escalation in mechanical revenue which reached $14 million from $11 million in the previous year’s quarter.
Warner Music Group CEO Steve Cooper was excited by the results and the company’s future.
“Hitting an all-time high in our 18 years as a standalone company is proof that we’ve never been stronger,” he said.
“At the same time, we’ve never had so much opportunity ahead of us.”
He added: “We look forward to welcoming back huge superstars, breaking new artists and songwriters, and seeking out more innovative ways to bring more music to more people in more places.”
He also emphasised what he sees as the company’s point of difference.
“Our creative expertise, global agility, and willingness to experiment set us apart from the competition and solidify our important role across the entire music ecosystem,” he said.