Warner Music Group posted its latest quarterly financials last night, with revenues rising 1.7% year-on-year to $829m, but its net loss also increasing by 13.9% to $41m over the same period.
The figures reveal the slim margins of the major label’s business, with $445m cost of revenue and $296m of selling and general expenses eating up a big chunk of its income even before amortisation and interest expenses pushed it into the red.
Breaking the figures down: WMG’s recorded music division reported revenues of $714m in the final quarter of 2014, up from $691m the year before. Its publishing arm’s revenues dropped from $128m to $119m over the same period. For recorded music, WMG made $293m from physical sales, $272m from digital, $76m from artist services and expanded rights, and $73m from licensing.
Physical revenues actually grew faster than digital year-on-year: 20% compared to 16%. Why? WMG cited Q4 releases by artists like Johnny Hallyday and Pink Floyd, who tend to skew more physical in their sales. One key sentence though: “Streaming services revenue growth of $26 million was partially offset by digital download declines of $7 million”.
A useful stat in the ongoing debate about the ownership-to-access transition, with albums like Ed Sheeran’s ‘x’ delivering in streams over time as well as sales. “We know that the music industry will continue to evolve. We are mindful of the ongoing macro trends, such as the decline in physical and download revenue, and the rapid rise of streaming,” said CEO Stephen Cooper, as the results were announced.