Warner Music Group (WMG) has released its financial results for the quarter ending June 30, 2024, showing mixed performance across its revenue streams. The company’s total revenue for this period was $1.55 billion, with notable growth in subscription streaming revenues.
Revenue Breakdown and Streaming Success
WMG’s total revenue for the quarter reached $1.554 billion, encompassing recorded music, music publishing, and other activities. This represents a modest year-over-year (YoY) increase of 0.6% on a constant currency basis. Excluding impacts from terminated agreements and changes in royalty rates, the company’s revenue grew by 3.1% YoY at constant currency.
The recorded music segment, which accounted for $1.251 billion of the total revenue, experienced a slight decline of 1.1% YoY at constant currency. This was primarily due to decreased revenues from artist services, physical sales, and licensing, offset by gains in digital revenue. Despite the overall decline, recorded music streaming revenue showed robust growth of 10.2% YoY at constant currency, reaching $863 million. Subscription streaming revenues were particularly strong, increasing by 13.7% YoY at constant currency to $640 million.
Impact of Agreement Terminations and Rate Changes
WMG noted that the termination of its distribution agreement with BMG and a renewal with a digital partner negatively impacted its recorded music digital revenue by $26 million and $3 million, respectively. Additionally, a previous benefit from a Copyright Royalty Board ruling in the prior-year quarter reduced publishing revenue growth by $7 million.
Despite these challenges, Warner Chappell Music, WMG’s publishing division, saw its quarterly revenues increase by 8.9% YoY at constant currency to $305 million. Excluding the impact of the CRB Rate Benefit, publishing revenue grew by 11.7% YoY at constant currency. Streaming revenue in the publishing division increased by 7.9% YoY at constant currency to $192 million, with an adjusted growth of 12.3% YoY when excluding the CRB Rate Benefit.
Performance in Physical Sales and Licensing
WMG’s physical revenue decreased by 4% YoY at constant currency to $120 million, primarily due to the timing of releases and strong US sales in the previous year. Licensing revenue also saw a slight decline of 1.1% YoY at constant currency to $90 million, driven by the timing of copyright infringement settlements.
Artist services and expanded-rights revenue experienced a significant decline of 26% YoY at constant currency to $159 million. This drop was attributed to lower merchandising and concert promotion revenues, especially in Japan and France, and the exit from owned media properties.
Outlook and Strategic Initiatives
Despite these mixed results, WMG’s CEO Robert Kyncl remains optimistic, highlighting the company’s strong performance in subscription streaming and commitment to long-term artist development. CFO Bryan Castellani emphasized the importance of streaming performance and disciplined cost management in achieving robust margin expansion and operating cash flow growth.
Looking ahead, WMG aims to continue its focus on nurturing the next generation of artists and songwriters, enhancing the value of its music catalog, and positioning itself for sustained future growth.
