The quarter ended March 31 was a tough one for Warner Music Group, as its quarterly revenue dropped 1% over the same period last year and net income was down almost 63%.
On the company’s earnings call Thursday morning, CEO Robert Kyncl pointed to a lighter release schedule, market share loss in China, and an unflattering comparison to last year’s results for the same quarter, while looking ahead to the company’s current chart success with new artists like Benson Boone, Teddy Swims, Alex Warren, Ovi on the Drums, the Marias, Ravyn Lenae as well as expected releases from more-established acts like Ed Sheeran and Bruno Mars.
Kyncl also pointed to the company’s increased investment in A&R, its market share in new releases and new technologies like Pulse, announced Wednesday, which gives artists, songwriters and their teams with a view of their streaming, audience, and social performance, along with up-to-date summary of their earnings across royalties, physical, sync, and other areas.
“We recognize this is a moment of transition, in the industry and for our company,” CEO Robert Kyncl said on the call. “Even so, we are very optimistic for many reasons, but three in particular: One, against a backdrop of global uncertainty, music is the most resilient art form, and currently the least expensive. Two, the industry is aligned behind driving growth through subscribers and price increases, and three, WMG has the right creative and commercial strategies in place. We’re sharpening our execution as we stay focused on long-term growth and profitability.”
The company reported overall revenue of $1.48 billion and recorded music revenue of $1.175 billion, a 1% drop, for the quarter. Publishing revenue was up 1% to $310 million, while net income was $36 million compared to $96 million in the same quarter last year, owing to lower recorded music revenue, a $34 million drop due to exchange rates, and an $11 million tax increase. Total digital revenue slipped 1% with streaming revenue flat. Adjusted operating income before depreciation and amortization dropped 3% to $303 million.
In constant currency, overall quarterly revenue rose 1%, although recorded music and publishing declined by 2% and 5% respectively.
“Our strategy is starting to bear fruit, with our strongest chart presence in two years,” Kyncl said in a statement. “As a result, our true strength this quarter was partially obscured by challenging comparisons with last year’s outperformance. As we replicate our strategy across other labels and geographies, and drive a virtuous cycle of greater reinvestment, we expect to deliver lasting value for artists and songwriters, and sustained growth and profitability for shareholders.”
Read the full article here
