Warner Music Group has reported record quarterly results in terms of revenue for the busy Q4 period (the major’s fiscal Q1 up to December 31, 2021)
WMG revenue was up 20.9% year-on-year (22.4% in constant currency) at $1.614 billion, driven by digital revenue growth of 21.5% across recorded music and music publishing.
“Hitting an all-time high in our 18 years as a standalone company is proof that we’ve never been stronger. At the same time, we’ve never had so much opportunity ahead of us,” said Steve Cooper, CEO, Warner Music Group. “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. In the coming year, 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.”
Recorded Music revenue was up 19.4% (20.9% in constant currency) at $1.386 billion due to growth across all revenue lines. Adjusted for the benefit of an additional week compared to the prior-year quarter, and the impact of a new deal with a digital partner, recorded music revenue was up 15.9% (or 17.4% in constant currency).
Digital recorded music revenue grew 19.7% (20.5% in constant currency) due to the strong performance of new and carryover releases, as well as revenue growth from emerging streaming platforms. Streaming revenue grew 20.8% (21.9% in constant currency). Adjusted for the benefit of that additional week and the impact of the new deal, recorded music streaming revenue was up 16.9% (18.0% in constant currency).
Digital revenue represented 62.8% of total recorded music revenue versus 62.6% in the prior-year quarter.
Hitting an all-time high in our 18 years as a standalone company is proof that we’ve never been stronger
Artist services and expanded-rights revenue increased 28.9% (33.3% in constant currency), reflecting an increase in merchandising and concert promotion revenue, both of which were disrupted by Covid in the prior-year quarter. Physical revenue grew 12.1% (14.0% in constant currency) primarily due to new releases, an increasing demand for vinyl products and Covid disruption in the prior-year quarter.
Recorded music operating income was $276 million, up from $223m in the prior-year quarter.
Music publishing revenue increased 30.9% year-on-year (31.6% in constant currency) to $229m. Digital revenue increased 34.3% (as reported and in constant currency) reflecting the continuing growth in streaming, as well as the timing of new digital deals.
Digital revenue represented 58.1% of total music publishing revenue versus 56.6% in the prior-year quarter. Sync revenue increased due to higher television, film and commercial income and Covid disruption in the prior-year quarter.
Performance revenue increased as bars, restaurants, concerts and live events continued to recover from Covid disruption. Mechanical revenue increased as businesses continued to recover from the disruption, and from strong physical sales.
Lou Dickler, acting CFO, Warner Music Group, said: “The strength and diversity of our revenue streams coupled with our operational efficiency drove margin growth, even as lower-margin revenue lines recovered. We’re committed to making sustained investments in our core business, and to taking pioneering steps that position WMG for the next wave of growth, all with a financially disciplined, ROI-focused perspective.”
Subscribers can read Music Week’s 2021 market analysis here.