The music industry’s growth story continues: Warner Music Group has just announced its financials for its fiscal fourth quarter, and thus its full financial-year figures.
The headline: 10.2% growth in total revenues. In fact, WMG saw its revenues grow from $3.25bn in the year ended 30 September 2016 to $3.58bn in the year ended 30 September 2017.
Within that, WMG’s digital revenues grew by 24.7% to £1.87bn – 52.3% of the group’s total revenues. Overall, Warner Music reported a net profit of $149m for its latest fiscal year, up from $30m the previous year.
“We’ve now had five consecutive years of global revenue growth in constant currency, and the last two were up double digits,” said CEO Steve Cooper in a statement.
“Our momentum reflects the tremendous talent and appeal of our artists and songwriters, and the strength of our worldwide operating team. Investing to maintain our growth will remain a priority into 2018 and beyond.”
Digging deeper into the stats: in its last fiscal year, WMG’s recorded-music revenues grew by 10.4% to $3.02bn, with digital accounting for $1.69bn of that – up 24% year-on-year, and now 56% of overall recorded revenues.
In the last fiscal year, WMG’s recorded-music business generated $1.34bn of streaming revenues – 79.3% of its digital total, and 44.4% of its overall revenue.
Note, in the third quarter of this year (WMG’s fiscal Q4) $371m of streaming revenues accounted for 48.4% of the label group’s turnover, meaning we’re nearing another tipping point: where streaming becomes the majority of its revenues.
Publishing arm Warner/Chappell saw its revenues grow by 9.2% to $572m for the last fiscal year. Digital was $187m of that – up 32.6% and accounting for 32.7% of the publisher’s revenues.
We’ll hear more about how Warner Music views these trends in the company’s earnings call tonight. Based on the recent appearance at Slush Music of its CEO, international and global commercial services Stu Bergen, expect enthusiasm tempered with caution about the streaming-fuelled upturn in the industry’s fortunes.
“The streaming story is a continuing positive story. I would caution us not to get drunk on two years of growth. We have to stay vigilant, continue to drive the adoption of paid streaming subscription,” said Bergen then.