Warner Music Group has published its latest quarterly financial results, revealing a 10% fall in revenues but a 77% narrowing in its net losses – although on a constant-currency basis, the former figure was a more positive 1% decline.
The major label reported $710m of revenues for the quarter ended 30 June 2015 compared to $788m a year ago, although it stressed that the decline was mainly due to currency fluctuations: “Total revenue was essentially flat year over year on a constant-currency basis,” claimed CFO Eric Levin.
WMG narrowed its net loss from $184m a year ago to $43m this last quarter. Meanwhile, digital revenues were down 3%, but up 4% on the same constant-currency basis referred to by Levin. Digital now accounts for 44.2% of WMG’s overall revenues, up from 41.4% a year ago. Although note that in its home market of the US, digital now accounts for 59.3% of WMG’s recorded-music revenues.
“Last quarter we were the first major to report that our recorded music revenue from streaming had outgrown our revenue from downloads. This quarter we saw the gap widen as streaming revenue grew 26%,” CEO Steve Cooper told analysts on WMG’s earnings call.
“There is little doubt that streaming is currently on a trajectory to become our largest revenue source… We believe that streaming, especially subscription streaming has the power to propel our industry’s growth.”
Cooper added that WMG “remain highly focused on receiving fair value for us and our artists and songwriters, and we are committed to working with our partners to improve monetisation” while hailing the launch of Apple Music’s impact to “encourage more aggressive marketing, bolder experimentation and faster innovation” from rivals.
He picked out Spotify’s addition of videos and podcasts; Google Play’s personal-radio expansion; SoundCloud’s subscription plans; and Rdio’s Select tier as examples already.
“We’re beginning to see a real stabilisation of the revenue curve in the industry, and growth in other areas. so that while we would always welcome additional monetisation, the good news is that with the growth in streaming, with the kind-of flattening of the curve in the download decline and physical, the business looks like it’s stabilising,” added Cooper.