Warner Music Group‘s quarterly recorded music revenues hit $1.386 billion in the three months to end of December, driven by major sellers including Ed Sheeran, Coldplay, Dua Lipa and Silk Sonic.
That’s according to WMG’s new quarterly results (for its fiscal Q1 2022, but calendar Q4 2021), which, published today (February 8), reveal that the company’s quarterly recorded music revenues – including streaming, digital and physical sales, plus ancillary income – grew 19.4% year-on-year (or up 20.9% at constant currency).
WMG says that the quarter included an additional week, primarily reflected in its recorded music streaming revenue. Additionally, according to WMG, the quarter included the impact of a new deal with an unnamed digital partner, which it says, impacted its Recorded Music streaming revenue.
Adjusted for the benefit of the additional week and the impact of the new deal with WMG’s unnamed digital partner, Recorded Music revenue was up 15.9% (or 17.4% in constant currency).
Warner Music Group’s total revenues reached $1.614 billion in calendar Q4, up 21% YoY from $1.335 billion in calendar Q4 2020.
Breaking down WMG’s recorded music revenue figure for calendar Q4 2021 reveals that $836 million came from streaming (see Figure 4 below), a figure which was up 20.8% YoY (or 21.9% in constant currency).
Adjusted for the benefit of the additional week and the impact of the new deal with WMG’s digital partner, Recorded Music streaming revenue was up 16.9% (or 18.0% in constant currency).
Digital revenue (including streaming and downloads), grew 19.7% (or 20.5% in constant currency), from $727 million in the prior year quarter, to $870 million in the three months to end of December 2021.
Digital revenue represented 62.8% of total Recorded Music revenue, versus 62.6% in the prior-year quarter.
Meanwhile, WMG’s Artist services and expanded-rights revenue increased 28.9% (or 33.3% in constant currency) to $232 million, reflecting what WMG says was an increase in merchandising and concert promotion revenue, both of which were disrupted by COVID in the prior-year quarter.
Physical revenue grew 12.1% (or 14.0% in constant currency) to $195 million in the three months to end of December 2021. According to WMG, this growth was driven primarily by “new releases, an increasing demand for vinyl products and COVID disruption in the prior-year quarter”.
Additionally, licensing revenue increased 11.3% (or 12.7% in constant currency) to $89 million, which WMG pins on “higher synchronization and other licensing revenue, as businesses continued to recover from COVID disruption”.
PUBLISHING
WMG’s music publishing operation – Warner Chappell Music (WCM) – saw its revenues grow 30.9% (or 31.6% in constant currency) YoY to $229 million, up from $175 million in the prior year quarter.
The revenue increase was driven by growth across all WCM revenue lines including streaming, sync, performance and mechanical revenue.
Digital revenue increased 34.3% (as reported and in constant currency) to $133 million, reflecting, according to WMG, “continuing growth in streaming, including emerging streaming platforms, and timing of new digital deals”.
Digital revenue represented 58.1% of total Music Publishing revenue versus 56.6% in the prior-year quarter.
WCM’s streaming revenue increased 37.2% (or 35.8% in constant currency) to $129 million, compared to $94 million in the prior year quarter.
With Warner Music Group breaking out streaming revenues from publishing and recorded music in its Calendar Q4 earnings report (see Figure 4 below), the company reveals that its consolidated revenues generated from streaming (recorded music business and publishing operation combined) hit $965 million in calendar Q4 2021, up 23% YoY from $786 million in calendar Q4 2020.
Elsewhere, Warner Chappell Music’s synchronization revenue increased to $42 million, up from $33 million in the prior year quarter due to what WMG says is was “higher television, motion picture and commercial income and COVID disruption in the prior-year quarter”.
WCM’s performance revenue also increased, from $30 million in the prior year quarter, to $38 million in calendar Q4 2021, “as bars, restaurants, concerts and live events continued to recover from COVID disruption”, according to WMG.
Mechanical revenue increased by $3 million YoY, from $11 million in calendar Q4 2020 to $14 million in calendar Q4 2021, “as businesses continued to recover from COVID disruption and from strong physical sales” WMG reports.
“Hitting an all-time high in our 18 years as a standalone company is proof that we’ve never been stronger. At the same time, we’ve never had so much opportunity ahead of us.”
Steve Cooper, Warner Music Group
“Hitting an all-time high in our 18 years as a standalone company is proof that we’ve never been stronger.
“At the same time, we’ve never had so much opportunity ahead of us,” said Steve Cooper, CEO, Warner Music Group.
“Our creative expertise, global agility, and willingness to experiment set us apart from the competition and solidify our important role across the entire music ecosystem.
“In the coming year, we look forward to welcoming back huge superstars, breaking new artists and songwriters, and seeking out more innovative ways to bring more music to more people in more places.”
“The strength and diversity of our revenue streams coupled with our operational efficiency drove margin growth, even as lower-margin revenue lines recovered.”
Lou Dickler, Warner Music Group
Lou Dickler, Acting CFO, Warner Music Group, added: “The strength and diversity of our revenue streams coupled with our operational efficiency drove margin growth, even as lower-margin revenue lines recovered.
“We’re committed to making sustained investments in our core business, and to taking pioneering steps that position WMG for the next wave of growth, all with a financially disciplined, ROI-focused perspective.”
Music Business Worldwide
