How does a major label make money these days? The answer is, with great difficulty, and they're usually losing a lot of money. Which was the case for Warner Music Group last quarter: according to the company, losses for the period topped $32 million, which is only good when compared to last year's quarterly loss of $46 million.
Overall, revenues topped $654 million, with digital assuming a greater chunk of the pie. Here's a breakdown of every single dollar earned by Warner Music over the past three months (the painfully-detailed filing is here).
Updated: Warner Music now says 25 percent of its digital recording revenue comes from streaming, per All Things D.
F. Hampton Thursday, August 09, 2012
Ayee, the all seeing eye.
@lirixiznice Thursday, August 09, 2012
If you're in the music industry this a must read.
sean parker Thursday, August 09, 2012
how much do they make from owning a portion of spotify?
Casey Friday, August 10, 2012
Most likely nothing? Spotify isn't profitable.
Krakow Friday, August 10, 2012
You seriously trust what some major label tells the Wall Street Journal? There's obviously no learning going on here.
First off, Spotify paid KINGS RANSOMS for licensing, add that to the pot and of course you are not cannibalizing the iTunes downloads. Just another dumb number fudge by another major label in desperate trouble
LostInDigital Monday, August 13, 2012
No, really Spotify isn't profitable, just like 99% of music-based business.
This is a marketing tool for the majors and used as the alternative to online piracy (as long as it offers free plans).
Apple is not making significant money with iTunes, it's just a way to sell iPods / iPhones.
Roger Roger Sunday, August 19, 2012
iTunes grossed well over $ 6 billion dollars last year, on a 30% margin, so while I agree the real money is in the devices, its not bad incremental income, considering where the labels and the industry as a whole is at .
HansH Friday, August 10, 2012
Quoting Peter Kafka from All Things Digital:
"What’s more encouraging for Warner — and, presumably, the rest of the big labels — is that streaming revenue is growing quickly, but doesn’t seem to be cutting into traditional digital sales from outlets like iTunes.*"
And that's good news for independent artists as well.
REMatwork Friday, August 10, 2012
Speaking of iTunes Match, in what category is the iTunes Match fee recorded?
paul Friday, August 10, 2012
I believe digital, but not in the streaming subset. Here's what WMG told AllThingsDigital on the topic.
*Warner defines “streaming” revenue as money it gets from subscription services like Spotify and Rhapsody, along with Web radio revenue from the likes of Pandora, Sirius and Clear Channel. It doesn’t include the new cloud/locker services from Apple and Amazon. [UPDATE: That number does include YouTube, though, which is a significant income source for some corners of the business.]
hth, and please anyone add more.
@danielalexandr Friday, August 10, 2012
Menno Friday, August 10, 2012
Nice to see physical still takes up 29%. I don't have it with this music as thin air through streaming and files.
@DaRealMarvelous Sunday, August 12, 2012
Shoutout to streaming services like Spotify and Rhapsody for bringing in some money...
@thegreathustler Sunday, August 12, 2012
This is crazy!
@steveohj Sunday, August 12, 2012
this is an eye opener for those who don't know.
Nick Strongbow Monday, August 13, 2012
This is a clear indication of the split in revenue, but to get an even better picture additional information is necessary. What is the split between catalogue and new releases. This would show how healthy the company is, breaking new artists is the future the costs of which need to be covered by creative and consistant sales of the catalogue.
Also what is the split between local artists and those with international reach? Rarely is a new artist release profitable if it only sells in the country of origin, except maybe a US artist. You need those sales in Europe, Japan and the US to make the project earn the investment back.
paul Monday, August 13, 2012
I can dig deeper into both Catalog and US/International splits, I think there's more information available.
What's really scary is the percentage of revenue contribution across both recordings and live performance that come from catalog (ie, legacy artists and stuff released at least 18 mos. ago). I'd hypothesize before looking that this is an extremely large chunk, maybe even a majority of revenues.
SoloRecords Monday, August 13, 2012
My advice to those who are diving into this music industry, get out of the business while you can!!