Warner Music streaming revenue up 20.5%, but publishing dips

The streaming phenomenon continues to fuel the growth of Warner Music Group (WMG).

Revenue grew by 10.4% (13.4% in constant currency) to US$1.058 billion in calendar Q2 (fiscal Q3).

Streaming alone accounted for $540 million, up 20.5% in the three months to the end of June.

“Our third-quarter results are proof of our continued momentum,” said WMG chief executive Steve Cooper.

“To say that streaming is responsible for the recovery of our business is an oversimplification.

“Without the talent and creativity of our artists and songwriters, and all of the investment and expertise that we put behind them, there would be no growth.”

In the wake of WMG’s figures, Music Business Worldwide estimated that all three majors – Universal, Sony and Warner – are together generating nearly $1 million each hour from streaming.

The big three turned over $2.08 billion from recorded music streaming consumption in the three months to the end of June.

Back to WMG’s Q3 achievements: recorded music revenue was up 13.8% (16.9% in constant currency) to $913 million.

These were spearheaded by significant sales from Ed Sheeran, A Boogie Wit da Hoodie, The Yellow Monkey, Nipsey Hussle and Cardi B, as well as a $59 million increase related to the acquisition of merchandise company EMP.

Digital revenue now represents 61.2% for the major’s total revenue (60.1% in the same quarter in 2018) after growth of 12.5% (or 15.5% in constant currency).

However, the news was not so buoyant for WMG’s publishing division, Warner Chappell Music.

Its revenue was down by $12 million year-on-year (by 7.5% or 4.5% in constant currency), attributed by WMG to accounting changes, “lower market share and loss of administration rights in certain catalogues”.

A drop in performance royalties were significant, down 29.4% year-on-year to $36 million.

But Warner Chappell Music’s digital revenue was up because of “the ongoing shift to streaming and in synchronization due to higher activity”.

Cooper noted that WMG’s market share for recordings is 16.5% and music publishing is 12.3%.

But he added that the amount of music being added to DSPs – 40,000 tracks a day – was making it difficult to create more break-throughs.

“We value our relationships with streaming services and there is no question they provided strong digital platforms that helps music travel around the world faster than ever,” he said.

“[But] the sheer volume of music being released on these platforms is actually making it harder for great artists and songwriters to get noticed.”

Over a nine-month period, WMG total revenue grew 13% to $3.351 billion – of which streaming constituted $1.579 billion, year on year.

Of this $3.351 billion, recorded music represented $2.89 billion (up15.6% from $2.5 billion from the year-earlier period) while publishing dipped to $470 million from $476 million.