Warner Music Group streaming revenues up 23% in 2019

Warner Music Group streaming revenues up 23% in 2019

Warner Music Group’s recorded music division has posted annual streaming growth of 22.8% (26% at constant currency) for the financial year ending September 30, 2019.

The major passed $2 billion in recorded music streaming revenues for the year with a total of $2.129bn (£1.653bn), up from $1.733bn (£1.346bn). That result includes $550m (£437m) for Q4, an increase of 18% on the prior year quarter.  

Streaming now accounts for 55.44% of full-year recorded music revenue, which reached $3.84bn (£2.98bn), a year-on-year increase of 14.3%.

Total revenue for the full year increased 11.7% (14.7% at constant currency) to $4.475bn (£3.474bn).

“We are passionate champions for our recording artists and songwriters and work tirelessly to help them build long-term global careers,” said Steve Cooper, Warner Music Group’s CEO. “Their talent and our focus and dedication made for an excellent fiscal year, and we're excited by the multitude of growth opportunities which lie ahead in 2020 and beyond."

During the fourth quarter, total WMG revenue grew 8.2% (10.4% at constant currency) to $1.12bn (£869m). Major sellers included Ed Sheeran, Lizzo, Mariya Takeuchi, Slipknot and Cardi B.

“We are now five years into the industry recovery,” said Cooper during the earnings call. “We still see plenty of room for more growth.”

Cooper also noted the recent “historic trio of UK No.1s” for Parlophone. The label has a big release this week from Coldplay

Cooper suggested that WMG was an early adopter of TikTok for its artists, alongside other new services and tech.

“The only constant in our industry is change,” he said. “We must always be evolving and diversifying our business.”

The only constant in our industry is change

Steve Cooper

During Q4, there was growth in recorded music digital, artist services, expanded-rights and in music publishing digital and sync revenue, though it was partially offset by declines in recorded music physical revenue, music publishing performance and mechanical revenue. Revenue grew year-on-year in all regions; digital revenue grew 13.1% (15% at constant currency) and represented 60% of total revenue, compared to 57.4% in the prior-year quarter.

For the full year results at WMG, there was a similar story in terms of growth and decline. Recorded music physical sales were down 12.52% year-on-year to $559m (£433.9m). Revenue grew in all regions. Digital revenue grew 15.9% (or 18.7% in constant currency) at $2.343bn (£1.818bn), and represented 58.3% of total revenue, compared to 56.2% in the prior year. 

Recorded music operating income was $439m (£340.7m), up from $307m (£238.3m) in the prior year.

Big sellers for the 12 months included Sheeran Johnny Hallyday, The Greatest Showman, Cardi B and Meek Mill.

Music publishing revenues dipped 2% year-on-year at $643m (£499.1m).

While the publishing business experienced a small decline under the new leadership of Guy Moot and Carianne Marshall, Cooper was confident about its direction and recent signings including Lizzo, Ava Max, Tones And I and Tayor Parx

“We are already seeing signs of gathering momentum,” he said.

Operating income for the full year was up 64% at $356m (£276.3m), while OIBDA was up 31% at $625m (£485.1m).

“Our revenue and OIBDA performance was strong,” added Eric Levin, Warner Music Group’s EVP and CFO. “With $619 million on our balance sheet at year-end, the cash generating power of our business has never been clearer."

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