Warner Music Group‘s Q2 earnings report backs up its rep as a music company that “gets” digital. Revenue from online hit $92 million, up 109 percent from $44 million in Q2 last year. Perhaps more important, that represents 11 percent of the company’s total revenue and digital accounted for half of the year-over-year gain.
Worldwide, online and mobile revenue are split about 50-50 (mobile revenues outside U.S. are about $12 million); online is heavier in the U.S., wireless is heavier internationally.
WMG more than doubled its mobile reach in the past year to 1.4 billion subscribers; that includes the new agreement with China Unicom. WMG sees mobile as a way to make inroads in countries like China where physical piracy is endemic. During the quarter, WMG also became the first company to make SMS tones commercially available.
Variable pricing: Asked if mobile music prices were dropping, Michael Fleisher, CFO said: “We don’t set retail pricing; retailers set pricing so what the phone companies do or other retailers do is not our business. We have not lowered our wholesale prices to mobile operators.”
On SMS tones: Beginning in Germany, where more than 30 billion text messages were exchanged last year, we signed multi-territory agreements with operators including Vodafone and O2.
Some more in transcript, here.
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