Warner Music Group (WMG) has reported global revenues of $1.55 billion in the second quarter of 2024.
The company revealed this in its financial results for the second quarter of the 2024 calendar year, which corresponds to the company’s fiscal Q3. WMG’s revenue encompasses recorded music, music publishing, and other activities.
The company’s financial report also revealed some hurdles that affected its recorded music digital revenue growth. In an SEC filing on August 7, 2024, the company attributed a negative impact on its revenue to the termination of its distribution agreement with BMG, a German music company.
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This termination resulted in a $26 million reduction in revenue compared to the same quarter in the previous year. Additionally, WMG faced a $3 million “unfavorable impact” on its recorded music streaming revenue due to a renewal agreement with one of its digital partners.
Further analysis of WMG’s financial performance revealed that its publishing division also encountered challenges. The company reported that a $7 million benefit in the prior-year quarter, stemming from a ruling by the Copyright Royalty Board, did not recur in the current quarter. This ruling had previously upheld higher percentage-of-revenue US mechanical royalty rates, contributing to the prior year’s favorable figures.
Despite these setbacks, WMG’s overall revenue demonstrated positive growth when excluding the aforementioned factors. Excluding the BMG termination, the digital license renewal, and the CRB rate benefit, the company’s total revenue experienced a 3.1 percent year-over-year increase at a constant currency. However, when factoring in these impacts, WMG’s company-wide revenue for calendar Q2 showed a more modest 0.6 percent year-over-year increase at a constant currency.
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WMG’s recorded music revenues for calendar Q2 amounted to $1.251 billion. This figure represents a 1.1 percent year-over-year decrease in constant currency. The company attributed this decline to reduced revenues from artist services, expanded rights, physical sales, and licensing. However, these decreases were partially offset by growth in digital revenue, indicating a shift in the music consumption landscape.
A detailed examination of WMG’s recorded music revenue, excluding the BMG termination and digital license renewal impacts, revealed a 1.2 percent year-over-year increase at a constant currency. This suggested that the company’s core recorded music business remains resilient, despite external challenges.
WMG’s recorded music streaming revenue, encompassing ad-supported and subscription-based models, showed a robust 10.2 percent year-over-year increase on a constant currency basis. This growth was adjusted to account for the impact of BMG termination and digital license renewal, highlighting the underlying strength of WMG’s streaming business. The company’s revenues from recorded music subscription streaming alone reached an impressive $640 million in calendar Q2. After adjusting for the factors above, revenues from this stream exhibited a substantial 13.7 percent year-over-year increase at a constant currency.
In terms of ad-supported recorded music streaming revenues, WMG generated $223 million in calendar Q2. This figure represents a 0.9 percent year-over-year increase at a constant currency, indicating a relatively stable performance in this revenue stream.
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Robert Kyncl, CEO of Warner Music Group, expressed optimism about the company’s future, emphasizing its commitment to nurturing emerging artists and songwriters, revitalizing its iconic catalog, and collaborating with partners to enhance the value of music.
Furthermore, WMG’s expansion plans in Africa underscore its global ambitions. In May 2024, Warner Music Africa announced its intention to establish a new creative hub in Lagos, Nigeria. This move signifies the opening of Warner’s first fully-owned office in the Nigerian market, where it has previously invested in the independent Nigerian music company Chocolate City. WMG’s expansion into Lagos aims to strengthen its presence in the local creative ecosystem by providing A&R, operations, and marketing expertise. This strategic move aligns with the company’s goal of fostering growth and innovation within the global music landscape.
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