Warner Music Group Gets Bigger Boost From Streaming

A growing share of Warner Music Group Corp.’s revenue in the latest quarter flowed from music streaming and other digital channels, a sign of how the coronavirus pandemic is reshaping listeners’ habits amid an altered landscape for the music industry, according to The Wall Street Journal.

Revenue for the music label was roughly flat year over year in the July-through-September period, rising by 0.2% to $1.13 billion. Digital revenue made up a significantly larger share of that sum, growing 15% to $778 million, from $674 million in the year-ago quarter.

In Warner Music’s recorded-music segment, revenue from physical sales was roughly flat in the fiscal fourth quarter, while digital sales grew 13%. Revenue from artist services, expanded rights and licensing all dropped as the pandemic disrupted touring and merchandising.

Music-publishing revenue declined 2.3% year over year, but digital music-publishing revenue was up by 32% from last year’s fourth quarter.

In its full fiscal year, which ended on Sept. 30, Warner Music’s digital revenue grew 11%, making up 65% of the company’s total revenue, compared with 58% in the previous 12-month period.

The rising importance of digital channels could persist beyond the pandemic if listeners’ social-distancing habits prove hard to break, Chief Executive Stephen Cooper told analysts on a call Monday.

Warner Music’s $1 million loss in the latest quarter—a break-even result on a per-share basis—fell short of the FactSet consensus estimate for a 4-cents-a-share profit.

The New York City-based company owns labels including Atlantic Records, Elektra Records and Warner records. It is also the parent of Warner Chappell, a music publisher.