Pictured Credit: James Minchin IIIWMG's major sellers in Q4 included Linkin Park (pictured), Charli XCX, Teddy Swims, Mariya Takeuchi and Benson Boone
Warner Music Group has published its financial results for the three months ended December 31, 2024 (calendar Q4 – the company’s fiscal Q1).
According to a financial filing released today (February 6), the company saw its quarterly global company-wide revenues reach USD $1.666 billion (across recorded music, music publishing, and other activities) in calendar Q4.
A bit of housekeeping before we dig into the numbers:
Warner Music Group explained in the new filing that its recorded music revenue growth in the quarter (calendar Q4) was impacted by a licensing agreement extension for an artist’s catalog, which resulted in $75 million of licensing revenue in the prior-year quarter.
In addition, WMG’s recorded music growth was impacted by the termination of its distribution agreement with BMG, which WMG reports resulted in $32 million less Recorded Music revenue compared to the prior-year quarter (the same in constant currency), of which $16 million impacted streaming revenue and $16 million impacted physical revenue.
Warner’s recorded music growth was also impacted by a renewal with one of the company’s digital partners, which resulted in $30 million of recorded music streaming revenue in the prior-year quarter (or $26 million in constant currency).
Excluding the Licensing Extension, the BMG Termination and the Digital License Renewal, Warner Music Group’s total revenue was up 4.4%YoY at constant currency in calendar Q4.
(Including the Licensing Extension, BMG Termination, and Digital License Renewal, revenue was down 3.6% YoYat constant currency
RECORDED MUSIC
Warner Music Group’s recorded music revenues reached $1.345 billion in calendar Q4, down5.9% YoY at constant currency, and driven, according to WMG, “by decreases across digital, licensing, and artist services and expanded-rights revenues, partially offset by growth in physical revenue”.
Excluding the impact of the Licensing Extension, BMG Termination, and Digital License Renewal detailed above, WMG’s Recorded Music revenue increased by 3.8% YoY at constant currency.
Major sellers in the quarter included Linkin Park, Charli XCX, Teddy Swims, Mariya Takeuchi and Benson Boone.
Warner’s recorded music streaming revenue (including ad-supported and subscription) reached $854 million in Q4 up 2.6% YoYon a constant currency basis (adjusted for the impact of the BMG Termination and Digital License Renewal).
WMG also breaks that figure down in its balance sheet to highlight the performance of its subscription streaming and ad–supported streaming revenues, respectively.
The company’s revenues from recorded music subscription streaming reached $631 million in calendar Q4.
Adjusted for the impact of the BMG Termination and Digital License Renewal, WMG’s subscription streaming revenue increased 6.6% YoYat constant currency, reflecting “continued market growth and price increases,” noted WMG.
WMG generated $223 million in ad-supported recorded music streaming revenues in calendar Q4, which was down 7.1% YoYat constant currency (adjusted for the impact of the BMG Termination).
This ad-supported recorded music streaming performance was driven, according to WMG, “by the timing of deal renewals and content delivery with certain emerging streaming platforms in the prior-year quarter.”
Elsewhere in WMG’s recorded music business, the company generated $110 million from licensing, down 38.5%YoY at constant currency, and driven, according to WMG by the impact of the Licensing Extension detailed above.
Physical revenue, meanwhile, reached $166 million in Calendar Q4.
Adjusted for the impact of the BMG Termination, WMG’s physical revenue increased 21.2% YoY at constant currency, driven, according to WMG, by “strong releases in the quarter, primarily in the US and Japan”.
Artist services and expanded-rights revenue decreased 3% YoY at constant currency due “to lower concert promotion revenue primarily in France, and a decrease in revenue related to the exit of the Company’s owned and operated media properties” announced as part of WMG’s Strategic Restructuring Plan.
“This quarter, we saw success with new stars, global superstars, longtime legends, and irreplaceable catalog.”
“This quarter, we saw success with new stars, global superstars, longtime legends, and irreplaceable catalog,” said Robert Kyncl, CEO of Warner Music Group, in a statement today.
He added: “As we drive efficiencies, we will enhance our virtuous cycle of reinvestment, creating new opportunities for talent, long-term growth, and shareholder value.”
Kyncl also noted in his statement that, “in [WMG’s] ongoing effort to both grow the pie and grow our share of the pie, we are increasing our A&R spend, acquiring valuable catalogs, and striking important agreements with streaming services”.
WMG announced earlier today that it has struck a new deal with Spotifythat overrides the controversial CRB ‘bundling’ payment structure in the US. The company also confirmed today that it has acquired a controlling stake in Tempo Music in a deal understood to have valued Tempo at north of $450 million.
Speaking on the company’s earnings call today, Kyncl noted that WMG’s “Tempo acquisition is a great example of our M&A strategy in action”.
He added: “As we become more efficient, we are creating a virtuous cycle that will enable greater reinvestment that delivers accelerated growth.”
Music Publishing
Warner’s global music publishing division – Warner Chappell Music – saw its quarterly revenues increase by 7% YoY at constant currency to $323 million, driven “by growth across digital, performance and other revenue, partially offset by lower mechanical revenue”, according to WMG.
Music publishing streaming revenue increased6.8% YoY at constant currency to $205 million, reflecting “continued market and catalog growth”.
Performance revenue increased 12% YoY at constant currency to $56 million due, WMG noted, “to an increase in touring activity outside the US and higher US radio activity.”
Mechanical revenue decreased 6.7% YoY at constant currency to $14 million, while Synchronization revenue, which reached $39 million, was flat compared to the prior-year quarter.
WARNER’S CALENDAR Q4 2024 IN SUMMARY (% IN CONSTANT CURRENCY):
Warner Music Group’s overall revenues were down 3.6%YoY at constant currency to $1.666 billion.
Excluding the Licensing Extension, BMG Termination, and the Digital License Renewal, total revenue was up 4.4%YoY at constant currency in calendar Q4;
Recorded Music revenues (adjusted for the impact of the Licensing Extension, BMG Termination, and Digital License Renewal) were up 3.8% YoY to $1.345 billion;
Within that figure, recorded music streaming revenue (including ad-supported and subscription) reached $854 million in Q4, up 2.6% YoYon a constant currency basis (adjusted for the impact of the BMG Termination and Digital License Renewal);
Recorded music subscriptionstreaming revenues (adjusted for the impact of the BMG Termination and Digital License Renewal) increased 6.6% YoYat constant currency to $631 million;
Music publishing revenues – at Warner Chappell Music – were up 7% YoY at constant currency to $323 million.
WMG: PROFITABILITY IN CALENDAR Q4 2024
WMG’s net income stood at $241 million versus $193 million in the prior-year quarter.
Operating income stood at $214 million versus $354 million in the prior-year quarter.
The firm’s quarterly adjusted OIBDA was $363 million versus $451 million in the prior-year quarter, down 18% YoY at constant currency.
Commenting on WMG’s latest results, Bryan Castellani, CFO of Warner Music Group added: “While temporary macro conditions created some pressure this quarter, the engine of our business is strong.”
“We are confident in our outlook, especially as our industry continues to evolve monetization models, which will help fuel our future growth.”
Bryan Castellani, WMG
“Our results were underpinned by the performance of our new releases and catalog, as well as healthy global subscriber trends.
“We are confident in our outlook, especially as our industry continues to evolve monetization models, which will help fuel our future growth.”Music ComeOn
