Warner Music Group Q2 revenue stable
Total revenue down 1.3% to $662 millionWarner Music Group's total revenue in the second quarter, to March 31, 2010, was down 1.3% year-on-year to $662 million.
The decline was 6% on a constant currency basis. WMG said the performance reflected a light release schedule, the continuing effect of a transition from physical to digital, and continued economic pressures affecting discretionary spending by retailers as well as a reduction of retail floor space dedicated to music.
Group digital revenue was $199 million (30.1% of total revenue), an increase of 15% from $173 million in the prior-year quarter. The constant currency increase was 11.8%.
Operating income grew 60% to $24 million from the prior-year quarter; operating income before depreciation and amortization (OIBDA) was up 8.8% to $87 million from Q2 in 2009. Net loss for the quarter was $25 million, or a loss of $0.17 per diluted share, compared with net loss of $68 million in the prior-year quarter.
"This quarter provided another example of our ability to generate stable results, even in the face of continued industry-wide pressures and a limited release schedule - delivering growing OIBDA with only moderate revenue declines," said Edgar Bronfman, Jr., Warner Music Group's chairman and CEO, in a statement.
"We remain on track to achieve our long-term financial and strategic goals, including driving free cash flow, developing innovative digital solutions, enhancing the value and growth of Warner/Chappell, investing in artist development and expanding our artist services business."
Steven Macri, WMG's evp and CFO, said the major expects the 2010 release schedule "to be fourth-quarter weighted."
Domestic revenue declined 7.1%. International revenue rose 4.6%, but decreased 4.5% on a constant-currency basis. Revenue growth in the U.K. was countered by "weakness" in the U.S., Asia and the rest of Europe.
Revenue from the company's recorded music business declined 0.9% from the prior- year quarter to $534 million, and fell 5.5% on a constant-currency basis. Major sellers in the quarter included Michael Buble, Christophe Mae, Muse and Paolo Nutini.
Recorded music digital revenue of $189 million grew 13.9% over the prior-year quarter (11.2% up on a constant-currency basis). It represents 35.4% of total recorded music revenue, compared with 30.8% in Q2 2009.
Domestic recorded music digital revenue was $117 million -- 46.8% of the total, compared with 41.0% in the prior-year quarter.
Recorded Music operating income grew to $6 million from $2 million in the prior-year quarter.
Music publishing revenue declined 1.5% year-on-year to $134 million, down 6.3% on a constant-currency basis. International Music Publishing revenue grew 3.8%, but fell 4.7% on a constant-currency basis. Domestic publishing revenue declined 8.6% from the prior-year quarter to $53 million.
Digital revenue from music publishing was up 85.7% from the prior-year quarter to $13 million, and rose 62.5% on a constant-currency basis. Mechanical revenue was down 2.4%, performance revenue declined 6.8% and synchronization revenue fell 4.0%.
On a constant-currency basis, mechanical revenue was down 9.1%, performance revenue declined 11.3% and synchronization revenue fell 7.7%.
Music Publishing operating income of $43 million was up 16.2% from the prior-year quarter.
Andre Paine is global news editor at Billboard.