Warner Music Leans on Digital Sales During Pandemic

Warner Music Leans on Digital Sales During Pandemic

The music label reports double-digit growth in digital revenue

A growing share of Warner Music Group Corp.'s revenue in the latest quarter flowed from music streaming and other digital channels, a sign of how the coronavirus pandemic is reshaping listeners' habits amid an altered landscape for the music industry.

Revenue for the music label was roughly flat year over year in the July-through-September period, rising by 0.2% to $1.13 billion. Digital revenue made up a significantly larger share of that sum, growing 15% to $778 million, from $674 million in the year-ago quarter.

In Warner Music's recorded-music segment, revenue from physical sales was roughly flat in the fiscal fourth quarter, while digital sales grew 13%. Revenue from artist services, expanded rights and licensing all dropped as the pandemic disrupted touring and merchandising.

Music-publishing revenue declined 2.3% year over year, but digital music-publishing revenue was up by 32% from last year's fourth quarter.

In its full fiscal year, which ended on Sept. 30, Warner Music's digital revenue grew 11%, making up 65% of the company's total revenue, compared with 58% in the previous 12-month period.

The rising importance of digital channels could persist beyond the pandemic if listeners' social-distancing habits prove hard to break, Chief Executive Stephen Cooper told analysts on a call Monday.

"We think there's a very reasonable probability that these last seven, eight, nine months and the continuing Covid assault [have]…changed a number of people's habits," Mr. Cooper said. "My own personal view is that there's going to be some change of thinking about packing yourself into stadiums or arenas."

He added that the company would continue to invest in digital channels such as live-streamed concerts.

Warner Music declined to provide guidance for the company's performance in 2021.

Warner Music's $1 million loss in the latest quarter -- a break-even result on a per-share basis -- fell short of the FactSet consensus estimate for a 4-cents-a-share profit.

Shares were down 4% to $27.81 at midday Monday, and are down by 9.2% since closing at $30.21 on the day of the company's initial public offering in June.

The New York City-based company owns labels including Atlantic Records, Elektra Records and Warner records. It is also the parent of Warner Chappell, a music publisher.



Do you like the content of this article?
COMMENT

India hospitals overwhelmed by virus, Japan to declare emergency

NEW DELHI: Hospitals in India launched desperate appeals for oxygen on Friday as the nation's Covid crisis plummeted to horrifying new depths, while Japan readied to declare a state of emergency for Tokyo just three months before it hosts the Olympics.

17:12

Man used gay dating app to steal from foreigners

A 29-year-old man who picked up gay foreigners on dating apps and slept with them in hotel rooms has been charged with stealing from his "lovers".

16:07

A little good news

A rise in exports gives some hope for the economy, currently reeling from the spike in virus infections, with rubber products leading the way.

15:25