Warner Music CEO Says Music Services Do Less Harm Than Video Streams

Warner Music Group, home to Cardi B, Ed Sheeran and Bruno Mars, on Tuesday announced higher fiscal revenue for the second quarter due to digital growth.

Recent earnings fell to $92 million from $117 million a year earlier, “primarily due to total realized and unrealized losses from certain investment markets.”

Quarterly operating income increased from $151 million to $166 million a year earlier, while operating income for amortization (OIBDA) increased from $228 million to $255 million, “primarily due to higher revenues.”

During an earnings call, Warner Music CEO Steve Cooper described music subscription services as “sticky” and argued that it was different from video streaming services whose subscribers are constantly looking for the latest content they want. “As the world grapples with wars, inflation and other macroeconomic problems, one thing is clear: the diffusion and value of music has already proved resilient to any kind of setback,” he said. “Unlike the video streaming market, which gets confusing when subscribers are constantly looking for new and different exclusive content, the music streaming market is complicated.”

He argued that users not only “have access to all the music they’ve ever wanted on one platform”, but especially “join the collections and playlists they’ve selected over time”. Cooper concluded, “While movies and TV shows may come and go, the commitment to your favorite music and artist runs deeper and longer.”

Ahead of the market opening, the top music company saw revenue increase 10.1%, or 12.1% in permanent currency terms, on revenue for the most recent quarter ended March 31 to $1.38 billion. , amid the digital growth in recorded music and music publishing. operations. .

Total streaming revenue increased 9.0%, or 11.6%, in fixed currency, driven by growth in “recorded music volume and music releases, including revenue from emerging platforms”.

In recorded music, the best sellers in the fiscal second quarter were Ed Sheeran, Michael Buble, Dua Lipa and the Red Hot Chili Peppers. Recorded music revenue increased 8.3% in the last quarter, or 11.4% in fixed currency. The company named “growth across all revenue lines, including digital revenue growth, reflecting the steady rise of streaming, the company’s biggest source of revenue.” Digital revenue increased 6.3% or 8.8% in fixed currency, license revenue increased 19.4% or 23.1% in fixed currency due to higher sync activity, and physical revenue increased 3.4% or 8.0% in fixed currency.

Music publishing revenue increased 19.8%, or 23.0%, in fixed currency. Earnings were driven by growth in “all revenue lines,” the company said. Digital revenue increased 22.1%, or 25.7%, reflecting steady growth in streaming, including emerging streaming platforms and the momentum for new digital transactions. Sync revenue increased due to increased commercial licensing activity, while performance revenue increased “as bars, restaurants, concerts and live events continued to recover from COVID delays,” the company said.

“Warner Music Group’s unique combination of scale and agility gives us, our artists and our songwriters an edge in a world of ever-expanding musical capabilities,” said Cooper. “We continue to build on our unprecedented artist development expertise, differentiated approach to global expansion and innovation at the intersection of music, gaming, social media and fitness.

Eric Levine, CFO, added: “The health and resilience of our business is reflected in the diversified revenue growth we achieved in the second quarter. As our core business continues to thrive, new growth drivers are constantly emerging. ”