It’s a good time to be a Warner Music Group artist.
Today, Warner Music Group released their first quarter financials ending on December 31, 2016. As expected, streaming pushed overall label revenues higher by 8%.
Yet, streaming didn’t only help push overall label revenues. WMG attributed top-selling artists like Bruno Mars and Michael Bublé for solid revenue growth. twenty one pilots, the Hamilton original cast album and the Suicide Squad soundtrack album also helped to push overall sales higher.
In a statement, Steve Cooper, WMG CEO, said,
“Our strong momentum continues with excellent first-quarter results including 11% constant-currency revenue growth on top of 11% growth in the prior-year quarter. While streaming continues to drive industry growth, we are outperforming the market thanks to extraordinary music from our artists coupled with first-class execution from our operators around the world.”
The biggest news in the financial report is that streaming revenue pushed the company over the $1 billion mark for the 2016 calendar year. Year-on-year, this represents a solid 47% year-on-year growth for the record label. During the same period, Sony Music reported $1.2 billion. Back in 2015, WMG became the first major music label to report $1 billion in annual revenue.
Eric Levin, WMG Executive Vice President and CFO said,
“We had another great quarter and I am very pleased with our revenue, OIBDA and cash flow performance. Our formula for sustainable growth is clearly working.”
Unsurprisingly, digital downloads and physical formats saw declining numbers. However, digital revenue offset the declining numbers. Total digital revenue climbed to $444 million from $348 million. It grew 27.6% (or 30.2% in constant currency) and represented 48.4% of total revenue. This number is up 7.4% over the prior-year quarter. Music streaming contributed $311 million.
Performance revenues also saw a 14% year-on-year decline to $37 million. Mechanical rights revenues also dropped 20% to $16 million. Music Publishing revenue rose 6.9% (or 10.7% in constant currency).
Warner reported an operating income of $123 million, up from $98 million year-on-year. Net income also saw a slight decline, from $28 million to $24 million. Adjusted net income was $28 million, flat with the prior-year quarter.