Warner Music Group saw its stock rise as much as 6% on Wednesday morning after reporting strong growth in streaming and publishing despite dips in sales of merch and physical product.
Net profit for the quarter was up almost 14% to $141 million from $124 million in the same period last year, while digital revenue was up 4.7% and streaming 5.5% over the same period last year, with subscription revenue rising 7%.
Revenue from WMG’s music publishing division rose by 8% to $305 million from $283 million in the year-ago quarter. Recorded Music streaming revenue rose 5%. Overall revenue fell by 1% to $1.55 billion from $1.56 billion in the year ago, largely due to the loss of BMG’s distribution deal with Warner’s ADA. Physical revenue dropped 4.8% due to release timing, the company said.
On the earnings call Wednesday morning, CEO Robert Kyncl pointed to the company’s success in launching new artists this year, including Benson Boone — who has the top single of the year with “Better Things” — Teddy Swims and Artemas. “So far in 2024, WMG has more new artists debuting on the Spotify global Top 10 than any other music company. And many of them are homegrown succcesses, signed very early in their careers,” he said.
He then address the recent industry-wide leveling-off of streaming numbers and concern over the majors’ relationship with Spotify (particularly over its new bundling options, which will earn songwriters and publishers an estimated $150 million less in the first year).
“I know that investor attention has recently been focused on the dynamics between labels and DSPs, with some speculating that we’re adversaries playing a zero-sum game,” he said. “That’s simply not the case. We’re actively engaged with our partners around ways to drive growth for all of us. Streaming dynamics remain healthy, with plenty of headroom for subscriber growth in both established and emerging markets.”
The call took place against the backdrop of significant change at the company: Atlantic Music Group CEO Julie Greenwald, who has been with the company for 20 years, announced on Tuesday that she will step down at the end of January, although she had been expected to remain as chairman. At the end of the next quarter (and fiscal year) on Sept. 30, 10K Project founder Elliot Grainge will take her place as CEO and Warner recorded music CEO Max Lousada will step down. The move reflects a major changing of the guard at the world’s third-largest music company.
Source Agencies
