Digital is the standout growth story for the Warner Music Group, which confirmed it saw digital revenue climb 39 percent to $166 million year-over-year, or 20 per cent of the company’s total revenue in its third quarter.
Digital sales strength came mostly from global online downloads, and to a lesser extent growth in international mobile.
Otherwise, WMG saw losses fall to $9 million from $17 million while overall revenues climbed 5 per cent to $848 million from $804 million.
More interesting, recorded music digital revenue of $156 million grew 39.3% over the prior-year quarter and represented 22.7% of total recorded music revenue. US recorded music digital revenue amounted to $101 million or 31.7% of total domestic recorded music revenue.
The company is home to various labels, including Asylum, Atlantic, Bad Boy, Elektra, Nonesuch, Reprise, Rhino and others.
Recorded Music revenue increased 5.1 per cent from the prior-year quarter to $686 million, and was down 1.0 per cent on a constant-currency basis, reflecting declining US sales.
International revenue grew 17.2 per cent and grew 3.6 per cent on a constant-currency basis. On a constant-currency basis, revenue grew in Europe and Canada.
“This quarter, we continued to outperform our competitors, even in the midst of a challenging recorded music environment,” said Edgar Bronfman, Jr., Warner Music Group’s Chairman and CEO. “We continue to advance our strategy to lead the recorded music industry’s transition with new business models, key partnerships and successful A&R investments. As we transform the business to position it for future growth in an evolving industry, we remain focused on driving profitability and cash flow, while prudently managing capital and costs.”
However, Bronfman also warned that video game makers will need to pay more to license songs for music-based video games like Guitar Hero and Rock Band.
“The amount being paid to the music industry, even though their games are entirely dependent on the content we own and control, is far too small,” he said.