More than a tenth of major record company Warner Music‘s revenues are derived outside of recorded music rights.
According to the firm’s latest fiscal results filing, a combination of ‘expanded-rights’ income – ie. live performance, merchandising and ticketing – plus ‘artist services’ agreements generated US $76m in the last three months of 2014.
The figure that was down 10% year-on-year, primarily owing to fewer blockbuster concerts. It represented 11% of Warner Music’s total revenue in the period, which tapped out at $714m.
Physical record sales contributed $293m, digital music sales raised $272m and licensing income hit $73m. Warner Music Group, which also includes publisher Warner/Chappell, posted total revenues of $829m.
Under these ‘expanded rights deals’, Warner participates in artist revenue streams outside of recordings, including live performances, merchandising and sponsorships.
Warner’s Artist Services operation – with ADA at its heart – is almost the natural opposite: its acts effectively ‘self-release’, keeping hold of their copyrights and essentially paying WMG a fee to carry out distribution, sales and other functions.
A major release coming up for Warner’s Artist Services team is Chasing Yesterday, the new LP from Noel Gallagher’s High Flying Birds (pictured). It will be released in March on the ex-Oasis man’s own Sour Mash label.
Warner explained: ‘We believe that entering into artist services and expanded-rights deals and enhancing our artist services capabilities will permit us to diversify revenue streams and capitalise on revenue opportunities in merchandising, fan clubs, sponsorship, concert promotion and touring. This will provide for improved long-term relationships with artists and allow us to more effectively connect artists and fans.’
It added: ‘Revenue from our management business and revenue from sponsorship and touring under expanded-rights deals are all high margin, while merchandise revenue under expanded-rights deals and concert promotion revenue from our concert promotion businesses tend to be lower margin than our traditional revenue streams from Recorded Music and Music Publishing.’Music Business Worldwide
