Warner Music Group Posts Fiscal Fourth-Quarter Loss
NEW YORK - Warner Music Group on Thursday reported a loss for its fiscal fourth quarter amid lower revenue as digital sales growth once again couldn't offset physical declines.
WMG's loss roughly doubled from $46 million to $103 million. Adjusted for certain items related to this year's acquisition by Len Blavatnik's Access Industries, WMG's loss narrowed minimally from $46 million to $43 million. The latest quarter included $10
million of severance charges, compared to $34 million of severance charges in the prior-year quarter.
Fiscal fourth-quarter revenue declined 6 percent to $707 million driven by lower physical sales, but digital revenue rose 7 percent to $210 million amid downloads and subscription/streaming services, partially offset by continued declines in the ringtone business. Digital represented 29.7 percent of total revenue in the quarter, compared to 26.2 percent in the year-ago period. Digital revenue even represented nearly 50 percent of U.S. recorded music revenue in the quarter.
Major recorded music sellers in the quarter ended Sept. 30 included the Red Hot Chili Peppers, Bruno Mars, Lenny Kravitz, Blake Shelton and Jason Derulo.
The company cited a light release schedule and "the continued transition to digital in the recorded music industry." In terms of geography, revenue growth in France, Spain and Latin America was offset by weakness in the U.S., Japan and the rest of Europe.
Full fiscal year revenue dropped 4 percent to $2.87 billion as the company's loss rose from $143 million to $205 million. The adjusted loss again narrowed from $143 million to $138 million.
“In the quarter and throughout the fiscal year, WMG continued to perform," said CEO Stephen Cooper. “The company grew digital and ‘360’ revenue, executed on its strategy of establishing more comprehensive artist partnerships and continued to position itself well for the opportunities that exist in the rapidly evolving recorded music and music publishing industries.”