Warner Music Group has reported its full-year results for the 12 months to September 30, 2023.
During the fiscal year, revenue passed $6 billion for the first time in the major’s history.
Robert Kyncl, who joined as CEO of Warner Music Group at the start of the year, said: “We delivered on our promise of second-half improvement, and reached over $6 billion in annual revenue for the first time in WMG’s history.
“As the music ecosystem is recognising the value of premium content and emerging markets continue to gain traction, our industry is healthy and growing. With these tailwinds at our back, we’ve been working hard to build a WMG that will excel in the music industry of tomorrow and look forward to bringing you incredible music in 2024 from our extraordinary artists and songwriters.”
“Our performance in the quarter was underpinned by a solid release slate and momentum in our recorded music streaming growth,” said Bryan Castellani, CFO, Warner Music Group. “This fueled our second-half improvement which, combined with our disciplined cost management, resulted in robust Adjusted OIBDA growth and margin expansion for the full year. We are excited about the opportunities that lie ahead for WMG to capitalise on favourable industry trends and drive shareholder value through profitable growth and healthy cash flow conversion in 2024 and beyond.”
In the past week, Warner Music Group has confirmed that it has signed up to Deezer’s artist-centric streaming model in France. WMG is also on board for YouTube’s AI music experiments.
WMG singled out successful releases in the 12-month period from Ed Sheeran, Zach Bryan, Linkin Park and Dua Lipa. During calendar Q3, it also highlighted the impact of Barbie The Soundtrack and releases by Fifty Fifty and MiSaMo.
The major’s 2023 results were impacted by comparison with the prior year, which had an extra week’s revenue from music consumption.
Total revenue increased 3.9% to $6.037 billion (all figures are on a constant currency basis). Digital revenue increased 4.9%, which includes the impact in the prior year of $38 million in downloads and other digital revenue from the settlement of certain copyright infringement cases.
Total streaming revenue increased 6.7% across recorded music and music publishing. Recorded music streaming revenue increased by 3.9%, which reflects a lighter release schedule and the market-related slowdown in ad-supported revenue in the first half of the year. Adjusted for the impact of an additional week in the prior year, recorded music streaming revenue was up 5.8%. Overall, recorded music revenue was up 1.8% year-on-year.
Music publishing streaming revenue increased by 22.6%, which includes the impact in the year and the prior year of $24 million and $20 million, respectively, from the CRB Rate Benefit. Overall, music publishing revenue increased by 15% year-on-year.
Revenue increases in the year were also driven by growth in recorded music licensing revenue and music publishing performance and mechanical revenue.
Recorded music physical and artist services and expanded-rights revenue, along with music publishing synchronisation revenue, were lower than the 2022 financial year on an as-reported basis and in constant currency.
Operating income was $790 million compared to $714 million in the prior year.
Revenue was up 4.5% during the Q4 period compared to the prior year. Recorded music streaming revenue increased by 8.9% due to a stronger release schedule and growth in ad-supported revenue, which includes the impact of the company’s TikTok renewal.