MUMBAI: Warner Music Group (WMG) reported a 10 per cent decline in revenue at $710 million for the quarter ended 30 June, 2015 (Q3 2015) as compared to the same quarter last year. However, compared to last quarter in 2015, the company witnessed a growth from $677 million Q2 2015.
The company, however witnessed growth in revenue from Asia and Latin America, which saw solid revenue growth with China a notable contributor. However, this growth was offset by revenue declines in the US and many European markets.
The company pointed that the decline in revenue was mainly due to change in exchange rates and timing of release activity. However, there was a rise in recording music licensing revenue by 3.2 per cent in Q3 2015, but there was a decline in digital by three per cent (and represented 44.2 per cent of total revenue, compared to 41.1 per cent in the prior-year quarter), which is supposed to be the most important revenue making area for many music labels, compared to same quarter previous year. Reasoning the decline in digital, the company said that it is due to fall in download revenue, which was due to growing streaming.
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Domestic recorded music digital revenue was $143 million this quarter and major sellers for WMG included the Furious 7 Soundtrack, Ed Sheeran, Muse, Josh Groban, Superfly and David Guetta.
Operating income was $23 million compared to an operating loss of $15 million in the prior-year quarter. The net loss of the company was $43 million compared to $184 million in Q3 2014. The increase in operating income is largely the result of lower PLG (Parlophone Records Ltd)-related expenses, the decline in expenses related to the company’s headquarters move and the benefit of ongoing cost-containment initiatives.
Music publishing revenue declined 10.2 per cent, from $137 million in Q3 2014 to $123 million in Q3 2015. The mechanical revenue declined by 19.4 per cent and performance revenue declined by 5.8 per cent in Q3 2015 compared to same quarter prior year.
Music publishing operating income declined by 50 per cent and operating margin declined two per cent this quarter compared to same quarter last year.
“I am pleased with our relative performance this quarter, given that Q3 was our strongest quarter in fiscal 2014,” said WMG CEO Stephen Cooper. “Our successes this quarter are due to ongoing growth in streaming revenue, a strong flow of outstanding music from our artists and songwriters, and first-class execution by our operators around the world.”
