The gargantuan success of Ed Sheeran’s ÷ and its predecessor X, along with the unwavering success of Bruno Mars, Twenty One Pilots, Japanese artist Kyosuke Himuro and the Hamilton musical soundtrack, had lead Warner Music Group to post a 10.7% year-on-year rise in revenues for its fiscal Q2.
Following the announcement of its “difficult” deal with YouTube, the major has released financial results for the period ending March 31, 2017. And surprise surprise, its overall revenue for the quarter of US$825m is thanks to – you guessed it – streaming.
In fact, $300m of the revenue generated from WMG’s recorded music division came from streaming – that’s up 45% (or US$93m) from streaming in the same period of 2016.
In March, Sheeran’s third LP ÷ smashed Spotify’s record for the most streams in a single week with 375 million globally. The record entered 14 global charts at #1. In Australia, it spent 8 weeks a #1, only to be dethroned last week by Bliss N Eso.
Sheeran also achieved a record in Australia with 18 songs in the ARIA Top 40 Singles chart in one week (16 from ÷ and two from his other two albums).
Other highlights from the quarter include:
– Operating income was US$78 million, compared to US$52 million in the prior-year quarter.
– A 10% rise in recorded music revenues to US$686m, up US$65m on the prior year.
– Download revenues dropped US$21m year-on-year to $100m.
– Physical music sales decreased by 6% to US$142m.
– Licensing revenue was flat at US$63m due to currency fluctuations.
– Merch sales in the US helped expanded-rights revenue increase by US$2m to US$81m.
– Net income was US$20m, compared to US$12m in the prior-year quarter.
– Revenues from WMG’s publishing arm Warner/Chappell grew 14.2% to US$145m due to revenue growth in digital (to US$43m), performance (to US$50m) and synchronisation (to US$32m).
– Sync revenue was offset by a decline in physical. Its increase of US$2m to US$32m was due to increased film and commercial income.
Eric Levin, Warner Music Group’s Executive Vice President and CFO said:
“This was a very strong quarter, marking the 7th consecutive quarter of year-over-year revenue growth.
“Although tough comparisons could make for a more challenging second half, I’m confident we’ll have another great full fiscal year.”