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Forget the last 10 years of post-Napster industry annihilation – Warner Music Group (NYSE: WMG) is now seeing growing income from both music sales and music publishing – but only if you factor in overseas sales; the U.S. business is still in rewind…
— Music sales: October-to-December recorded-music income was 3.4 percent up from 2008 – but that’s because international sales, from where WMG gets most of its money, jumped 12.7 percent; U.S. sales are down 9.5 percent. Global digital income is up 10.3 percent from last year, “driven by continued strength in international download revenue”, and now makes up 22 percent of music sales (or 34.7 percent in the U.S.).
— Music publishing: Same picture: income from licensing tunes to services, games etc was up 4.4 percent from 2008’s period, but thanks to 9.2 percent international growth; U.S. publishing income is down 4.2 percent. Digital licensing income didn’t grow at all over the year, but only due to timing of when WMG actually collected the royalties. It’s traditional media that are really helping – use of tunes in TV and movies helped synchronization revenue up 13.6 percent. Digital makes up only 10.6 percent of publishing income – perhaps reflecting the low rates that labels get from online services.
Across the board, the quarter’s digital revenue is up eight percent from the same period in 2008 to $184 million, though is unchanged compared with the previous three months in 2009; digital made up 20 percent of the company’s revenue.
Revenue was 3.5 percent up from 2008’s corresponding quarter to $918 million, but WMG swings to a $17 million net loss because the previous year included a one-off gain of $36 million from the sale of its Front Line Management stake.
WMG lost 8.8 percent of its total U.S. income over the year, but international sales jumped by 12.1 percent. “U.S. results were tempered by continued general economic pressures and the transition from physical sales to digital sales in the recorded music industry,” the release explains.