Streaming Drives WMG's Revenue to Double Digit Growth

Warner Music Group’s (WMG) recorded music revenues rose by $111 million year-on-year in calendar Q2 (its fiscal Q3) to $913 million. This figure is up by 13.8% or 16.9% in constant currency.

Total revenue grew by 10.4% (13.4% in constant currency) to US$1.058 billion in calendar Q2 in which 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, CEO, 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.”

These numbers were led 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). Physical music revenues dropped by 27% YoY to $95 million in the three months.

WMG’s publishing division, Warner Chappell Music suffered loss as the revenue was down by $12 million year-on-year. A drop in performance royalties was significant, down 29.4% year-on-year to $36 million.

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

“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,” Cooper added. 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 (up 15.6% from $2.5 billion from the year-earlier period) while publishing dipped to $470 million from $476 million.