Warner Music Group Corp. today announced its second-quarter financial results for the period ended on 31 March 2018. As a result, the giant record company witnessed a growth of 16.7% in the total revenue. The digital revenue grows to 24.6%, whereas the net loss is $1 million versus net income of $20 million in the prior-year quarter. Revenue has increased in all regions. Operating income of WMG was $83 million compared to $78 million in the prior-year quarter.
Interestingly, less than a week after Sony Music sold approximately 50% of its shares in Spotify, Warner Music Group Crop. sells $400 million of Spotify stock worth around three-quarters of its total equity in the streaming company.
According to Warner Music Group’s CEO Steve Cooper, the record company is having another excellent year with strong momentum around the world in both recorded music and music publishing. “We’re investing heavily in A&R, digital innovation and the transformation of our operations to ensure that we are positioned for long-term success,” said Cooper.
Now that Spotify’s equity is banked by WMG, Warner’s sale transaction suggests that Warner’s total pre-sale shareholding in Spotify was worth somewhere between $500 million and $550 million. “We’ll share these proceeds [the same way] we share revenue from actual streams and so-called digital breakage. In addition, we will be sharing equity proceeds with distributed labels – if [this is] included in their agreements with us,” said Cooper to MBW.
Adding on to that he also stated that this sale has nothing to do with WMG’s view of Spotify’s future. “We’re hugely optimistic about the growth of subscription streaming, we know it has only just begun to fulfil its potential for global scale.”