Warner Music Group Posts Weaker Quarterly Results
Digital now accounts for a quarter of total company revenue
NEW YORK - Warner Music Group's latest quarterly loss ballooned amid a 13 percent revenue decline, even though digital music revenue rose.
On a conference call, management didn't comment on whether it is considering a bid for rival EMI as recent reports have said. A combination of the two has been rumored and repeatedly discussed over the years. "It makes no sense to speculate on what happens next," WMG chairman and CEO Edgar Bronfman Jr. told analysts on the call.
For its fiscal fourth quarter, WMG on Wednesday reported a loss of $46 million, compared to a year-ago loss of $18 million, partly due to higher severance charges.
Revenue fell to $752 million, even though digital revenue of $197 million was up 7.1 percent. This is the latest sign that the digital music business can not offset declines in physical sales so far.
WMG said digital accounted for 26 percent of its total revenue in the latest period and 25 percent of revenue for the full fiscal year. Digital and non-traditional revenue grew to a combined nearly 40 percent of total revenue in the quarter.
"Our work to diversify revenue, and conservatively manage our costs, continues to help minimize the industry’s ongoing recorded music pressures,” said Bronfman. He also lauded the company's highest U.S. quarterly total album share in 14 years.
A decline in WMG's recorded music unit reflected weakness in the U.S., Japan and most of Europe, which was partially offset by strength in the U.K., Italy and Germany. Top sellers in the quarter included Linkin Park, Phil Collins and The Zac Brown Band.
Full fiscal year revenue for WMG fell 6.7 percent to nearly $3 billion as its loss rose from $100 million to $143 million.