Warner Music Group revenues flat in 2020, digital up 15% in Q4

Warner Music Group revenues flat in 2020, digital up 15% in Q4

Warner Music Group results for its fiscal 2020 period to September 2020 show that revenues are flat.

While that marks a slowdown in growth for the major, WMG did achieve a record result in 2019. It has also seen the impact of Covid-19 on physical music and merch sales. 

“We’re proud of everything we’ve accomplished in the past year, despite the challenging conditions that the world has faced,” said Steve Cooper, CEO, Warner Music Group. “We’re essentially flat against a record-breaking prior year and, during the quarter, we grew 11% on an as-reported basis, excluding the revenue streams most impacted by Covid.

“We’ve had huge successes from global megastars and local hitmakers, breakout sensations and long-time legends. Our streaming growth has stayed strong, and we’ve also seen an acceleration in a whole spectrum of emerging revenue streams such as social media, gaming, and in-home fitness. In this increasingly complex environment, where music is woven into every aspect of our lives, our creative expertise and global reach are more valuable than ever.”

Total revenue decreased by 0.3% year-on-year (or increased by 0.4% at constant currency) to $4.463 billion (£3.33bn). While streaming powered a digital revenue increase year-on-year of 11.2% (or 12.2% at constant currency) to $2.903bn (£2.17bn), there was a Covid-related impact on artist services, expanded rights revenue and performance revenue in music publishing. 

Recorded music revenue for 2020 was down 0.8% (or 0.2% at constant currency) at $3.81bn (£2.85bn). Physical sales were down 22.4% to $434m (£324m), which was attributed to market decline, the release schedule and, of course, Covid-19. Recorded Music digital revenue grew 9.6% (or 10.6% in constant currency) to $2.568bn (£1.92bn) and represented 67.4% of total recorded music revenue versus 61.0% in the prior year. Major sellers included Dua Lipa, Roddy Ricch, Tones and I, Aimyon and Cardi B.


Cooper, who’s had plenty to say on streaming and the value of music, welcomed signs that Spotify is ready to increase subscription price points.

“We do think this is good news that Spotify is beginning to take more seriously upward band pricing, and in the news that they're going to be testing a number of countries,” said Cooper during the earnings call. “I think that as subscriptions grow and as these services offer more verticals, it is likely that we will continue to see a number of the more substantial players exercising their ability to raise price.”

With services such as Amazon Music HD already launching at higher price points, Cooper doesn’t expect Spotify’s rivals to steal market share based on price.

“I think the other services… will look at this as an opportunity to also test the market and follow along,” he said. “I don't see any massive shift of subscribers from Spotify to other services. They have created their playlists, they have their routines on Spotify. And, as we said during the IPO, ultimately the value of the ears has to begin to catch up with the value of the eyeballs. I think this is a start. I'm very hopeful that it will be a successful start. And I believe this will give the other services the opportunity to follow.” 

We’re proud of everything we’ve accomplished in the past year, despite the challenging conditions that the world has faced

Steve Cooper

Cooper stressed that WMG has become a truly global company, with recent launches in Vietnam, India and Turkey.

“During Covid, we added to our global reach,” said Cooper.

Despite the impact of the pandemic, Cooper suggested that it’s helped the major look to the future.

“Covid is reinforcing the importance of technology across every aspect of our business, from how we sign talent to how we market music and how we pay royalties,” he said. “It's made us more agile and more efficient.”

Social media and gaming

Cooper also noted the impact of social media and user-generated content, which has seen catalogue return to the charts. 

“With an expanding number of partnerships, including Facebook, TikTok and Snap among others, social media is already a meaningful nine-figure revenue stream, and is growing at a rate faster than subscription streaming,” said Cooper.

And just as Music Week has reported on the power of gaming in our latest issue, Cooper looked ahead to the increasing importance of a market set to be valued at £100bn by 2025. 

“These platforms enable artists to engage with audiences through interactive immersive content that defies real world limitations,” he said.

Cooper also updated investors on the major’s diversity initiatives, including key appointments and its $100m social justice fund

“The fund is making disbursements to organisations that are doing amazing work on the frontlines of anti-racism, community transformation, musicians’ support and prisoners’ rights,” said Cooper.


Music publishing revenue was up 2.2% year-on-year (3.1% at constant currency) at $657 million (£490.8m). Music publishing sync revenue was flat, despite the impact from Covid, as a result of increased deal activity in China and the UK. US revenue declined by 1.1% and international revenue rose 0.2% (or 1.4% in constant currency). 

Intriguingly, Cooper said it recently persuaded an artist not to sell a share of rights - and he stressed that Warner was an operator not an investor, without mentioning any other companies by name.

"We do not typiclally sell rights," said Cooper. "We are very sensitive to how our artists feel about these transactions."

Asked to comment on how Warner avoids falling out with artists, Cooper said: "When we look at the ongoing back and forth between Taylor and [Scooter] Braun, these are types of situations we look to avoid."

Operating loss was $229m (£171m), compared to operating income of $356m (£266m) in the prior year. Net loss was $470m (£351m) compared to income of $258m (£193m) in the prior year. WMG said the net loss was primarily due to exchange rate fluctuation.

Q4 revenue was also flat, up just 0.2% (down 1.1% at constant currency). Recorded Music physical revenue was flat, despite the impact from Covid, as a result of strong physical releases in the US and Japan. The growth in the quarter was down to streaming, with digital revenue up 15.4% year-on-year (or 14.6% in constant currency),

“Our results are underpinned by the continued momentum we are seeing in streaming and the operating leverage driven by our digital transformation and business optimisation initiatives,” said Eric Levin, EVP and CFO, Warner Music Group. “As we look toward the future, we are confident in our long-term growth prospects, particularly as the areas of our business that have been most impacted by Covid return to normal.”

* To make sure you can access Music Week wherever you are, subscribe to our digital issue by clicking here.


author twitter FOLLOW Andre Paine

For more stories like this, and to keep up to date with all our market leading news, features and analysis, sign up to receive our daily Morning Briefing newsletter

subscribe link free-trial link

follow us...