Home » 30 November 2019 » WMG reports 14.3% rise in recorded music revenue in FY/2019, publishing revenue dips 1.5%

WMG reports 14.3% rise in recorded music revenue in FY/2019, publishing revenue dips 1.5%

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Warner Music Group released its reports for the fiscal fourth quarter for the period ending 30th September 2019. The recorded music revenue for the duration grew by 8.2% (or 10.4% in constant currency) to $953 million (pre-audit) in 2019 as compared to $863 million (pre-audit) in 2018.

The revenue for this duration included $54 million related to the acquisition of EMP which was partially offset by $31 million related to the sale of a concert promotion business and $4 million related to the adoption of ASC 606*.  Growth in digital and artist services and expanded rights revenue was partially offset by a decline in physical revenue.  The decline in physical revenue reflects industry trends and the timing of releases.

Licensing revenue was flat due to changes in exchange rates, the adoption of ASC 606 and higher broadcast fees. Digital revenue growth reflects the continuing shift to streaming.

Recorded Music revenue grew in all regions. Major sellers included Ed Sheeran, Lizzo, Mariya Takeuchi, Slipknot and Cardi B.

On the other hand, the revenue for recorded music for full-year rose 14.3% (or 17.2% in constant currency) to $3840 million (pre-audit) in 2019 as compared to $3360 million( 2018).

Revenue included $240 million associated with the acquisition of EMP and $5 million related to the adoption of ASC 606 which was partially offset by $94 million related to the sale of a concert promotion business.

Digital revenue growth reflects the continuing shift to streaming and timing of releases, which were partially offset by the impact of adopting ASC 606.  Recorded Music digital revenue grew 16.0% (or 18.8% in constant currency) and represented 61.0% of total Recorded Music revenue as compared to 60.1% in 2018.

Major sellers included Ed Sheeran, Johnny Hallyday, The Greatest Showman soundtrack, Cardi B and Meek Mill.

[*ASC 606 is the new revenue recognition standard that affects all businesses that enter into contracts with customers to transfer goods or services – public, private and non-profit entities. Both public and privately held companies should be ASC 606 compliant now based on the 2017 and 2018 deadlines.]

  

Where does Music Publishing stand?

In the fourth quarter of WMG’s Fiscal Report, despite phenomenal growth in digital and streaming revenue, music publishing witnessed a decline of 2.3% as compared to Q4/2018. The music publishing revenue for the same period (2019 vs. 2018) stood at $173 million and $177 million respectively.

However, the adoption of ASC 606 had a $3 million positive impact on revenue. The reason why the publishing side of Warner witnessed a decline was mainly driven by the decline in mechanical and performance revenue. The mechanical and performance revenue saw a slower market share and a loss of administration rights in certain catalogues.

Also, the growth in digital and synchronization revenue was more than offset by declines in mechanical and performance revenue.

In the full-year results too, music publishing revenue saw a decline of 1.5% or $10 million approximately.  In 2019, the music publishing revenue stood at $643 million vs. $653 million in 2019 and 2018 respectively. The $643 million revenue included $23 million related to the adoption of ASC 606.

Music Publishing digital revenue increased by 14.3% (or 17.3% in constant currency) reflecting the continuing shift to streaming and represented 42.1% of total Music Publishing revenue versus 36.3% in 2018.
Growth in synchronization revenue was largely related to changes in exchange rates.  The declines in mechanical and performance revenue primarily related to lower market share and loss of administration rights in certain catalogues.

Other Majors

According to Vivendi, Universal Music Group’s revenue in the third quarter of 2019 stood at $2 billion (€1.8 billion). The total quarterly revenue of $2 billion represented an increase of 16% as compared to the same duration in 2018.

The collected revenue was collected from segments across recorded music, publishing, licensing and merch.

The revenue for music publishing in Q3/2019 of UMG’s fiscal report stated that it was up by 8.3% to $328 million (€293 million).

Sony Corporation whose music publishing operation includes Sony/ATV, Sony Music Publishing Japan and the recently-acquired EMI Music Publishing, posted external quarterly revenues of $357.6 million for Q3/2019.

Sony’s overall music division – including recorded music, publishing and ‘visual media and platform’ – posted quarterly sales of $2.04bn (219.28bn Yen) in calendar Q3 / fiscal Q2, up 11.6% year-on-year at the US dollar level.

 

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Aakanksha Sharma

Author: Aakanksha Sharma

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