Light Release Schedule, Digital Transition Lead To Q4 Revenue Slip At Warner Music Group

Revenue Off

Revenue fell 6% in fiscal 2011 fourth quarter for WARNER MUSIC GROUP, dropping to $707 million, but digital revenue rose 7% to $210 million (representing 29.7% of total revenue, up from 26.2% in the same quarter of 2010), resulting in adjusted operating income rising 95% to $39 million while adjusted net loss attributable to the company narrowed 7% to $43 million.  The revenue figures were attributed to a light release schedule and the continuing transition to digital in the music industry for the revenue results, with growth in FRANCE, SPAIN, and LATIN AMERICA offset by weakness in the U.S, JAPAN, and the rest of EUROPE.

The company's Recorded Music division showed an 8% drop in overall revenue to $571 million, with digital revenue up 8% to $194 million (34% of overall revenue).  Domestic digital revenue for recorded music reached $107 million, which is 49.5% of total domestic recorded music revenue.  Top sellers included RED HOT CHILI PEPPERS, BRUNO MARS, LENNY KRAVITZ, BLAKE SHELTON, and JASON DERULO.

Music publishing revenue slipped 1% to $141 million, but last year's numbers included an additional $5 million in revenue from the mechanical royalty agreement between labels and publishers.  Mechanical revenue fell but performance revenue rose due to acquisitions and timing of collections from international societies.

"In the quarter and throughout the fiscal year, WMG continued to perform," said CEO STEPHEN COOPER. "The company grew digital and '360' revenue, executed on its strategy of establishing more comprehensive artist partnerships and continued to position itself well for the opportunities that exist in the rapidly evolving recorded music and music publishing industries."

"Our cost-management efforts and the continued transition from physical to digital revenue streams enabled us to increase adjusted OIBDA margins for both the fourth quarter and the fiscal year," added EVP/CFO STEVEN MACRI.

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