Warner Music Group Reports Total Revenues Off 8% For Q2, Recorded Music Down 9%
May 15, 2012 at 4:52 AM (PT)
WARNER MUSIC GROUP has reported its fiscal Q2 results for the period ended MARCH 31, 2012.
WMG reported total revenues off 8% to $628 million, from $684 million a year ago. Digital revenue rose 7%, from $220 million to $235 million. The company wrote, "Lower revenue for the quarter as a result of the company's light release schedule as compared to the prior-year quarter and continued physical revenue declines in the recorded music industry was partially offset by growth in Recorded Music digital and nontraditional revenue. Revenue growth in JAPAN and other parts of ASIA, ITALY and CANADA was offset by weakness in the U.S. and most of EUROPE, including the U.K. and FRANCE. Digital revenue represented 37.4% of total revenue for the quarter, compared to 32.2% in the prior-year quarter. Increased Recorded Music digital revenue reflects international growth in downloads as well as global growth in subscription/streaming services."
The Recorded Music Division reported revenues fell 9% from $552 million to $503 million. Digital revenues rose 8% from $205 million to $222 million. The company noted, "The company's Recorded Music business experienced an increase in digital revenue, as international download revenue and global subscription/streaming revenue were both strong. Recorded Music digital revenue represented 44.1% of total Recorded Music revenue, the company's largest percentage to date, compared to 37.1% in the prior-year quarter. Domestic Recorded Music digital revenue was $123 million, or 58.3% of total domestic Recorded Music revenue, the company’s largest percentage to date, compared to 48.0% in the prior-year quarter. The impact of a light release schedule and contracting demand for physical product more than offset the increase in digital revenue. Major sellers included SKRILLEX, THE BLACK KEYS, BRUNO MARS, ED SHEERAN and FUN. FUN.'s 'We Are Young' recently became the first track ever to log six weeks of 300,000 units or more in U.S. digital sales. Recorded Music non-traditional revenue grew due to an increase in merchandising and concert promotion revenue."
Music Publishing was off 7%, with revenues down to $128 million from $137 million a year ago. Digital revenues were also down, dropping 18% from $17 million to $14 million.
"With growing digital and non-traditional revenue partially offsetting the impact of a light release schedule as compared to the prior-year quarter, this quarter's results show the benefits of the company’s transformation," said CEO STEPHEN COOPER. "We remain optimistic about the company's performance over the course of the fiscal year as we continue to execute on our long-term strategy."
"Through ongoing focus on cost management, we were able to increase OIBDA, expand OIBDA margins and generate significant free cash flow," added EVP/CFO BRIAN ROBERTS.