Warner recorded music returns fourth $1bn in Q4

The segment, which includes streaming, digital and physical sales, and ancillary income, jumped from $1.15bn generated in calendar Q2 to $1.17bn, representing a 22.3% spike year-on-year, or up 21.1% at constant currency. In calendar Q4 2020, Warner returned recorded music revenues of $1.16bn, followed by $1.06bn in Q1 2021.

Streaming grew 22% year-over-year, contributing about $777m of the total recorded music revenue. Digital revenue, which includes streaming and downloads, grew from $679m in the same quarter last year to $807m in Q3 calendar, indicating a 19% jump. WMG said the growth was driven by new streaming platforms like Facebook, TikTok and Peloton.

Digital revenues represented 68.9% of the company’s total recorded music income, compared to 70.9% in Q3 calendar in the previous year. The decline was attributed to “the partial recovery of certain COVID-impacted revenue streams in the quarter”.

Warner’s artist services and expanded-rights revenue improved by 71.4% to reach $168m in calendar Q3. WMG’s physical revenues grew 21% year-on-year to $127m, propped up by “an increasing demand for vinyl products and continued recovery from COVID disruption”, WMG said.

WMG’s best sellers in the quarter included Iron Maiden, Dua Lipa, Ed Sheeran, Masked Wolf and Ava Max.

In terms of the music publishing business, WMG’s publishing arm, Warner Chappell Music’s revenues soared by 21.3% year-over-year to $205m in calendar Q3, compared to $169m in the same quarter last year.

The growth was primarily driven by digital revenue, synchronisation, mechanical and performance income. Digital revenue grew 20% to hit $120m, and synchronisation rose 44.4% from $27m in calendar Q3 2020 to $39m in calendar Q3 2021 due to “higher motion picture and commercial income and a one-time licensing settlement”, the company WMG said. Mechanical revenues increased from $10m to $13m, while performance revenue reached the $30m mark, indicating a 7.1% spike year-over-year.

“Music is essential to billions of people across the globe,” WMG CEO Steve Cooper said, adding that “great talent needs help to cut through the noise. By delivering for new artists and songwriters, returning superstars, and global legends, we’ve also delivered outstanding results in 2021,”

“Looking to 2022, we’re excited to release incredible new music from the world’s hottest artists and most influential songwriters. We’re also planning innovative moves and collaborations that will strengthen our leadership position across a vast universe of opportunities, in both the digital and physical worlds.”

WMG acting chief financial officer Lou Dickler said: “Our strong fourth-quarter results put an exclamation point on an outstanding year. Even as certain revenue was impacted by COVID, the strength and resilience of our music propelled us to double-digit revenue growth and margin expansion in 2021.

View the full report here.