Following a “challenging” Q1 2023 – including an acknowledged recorded music underperformance – Warner Music Group (NASDAQ: WMG) has reported $1.56 billion in second-quarter revenue.
The Big Three record label posted its Q2 2023 financials (for the third quarter of the business’s fiscal year) this morning, with the noted revenue figure representing an approximately nine percent year-over-year (YoY) boost and a close to 12 percent quarterly spike. As usual, the lion’s share of the sum ($1.28 billion, up eight percent YoY and 12 percent from Q1 2023) derived from recorded music, per TikTok-partnered WMG.
Within the category, digital including streaming brought in $846 million (up six percent YoY and quarterly), whereas physical releases generated $126 million (up slightly YoY and about seven percent quarterly), the resource shows. Meanwhile, the major label reported $218 million in Q2 2023 artist services revenue (up 15 percent YoY and 66 percent quarterly) and $92 million in licensing revenue (up 23 percent YoY but down six percent quarterly) to round out the recorded category.
Shifting to the publishing side, the Warner Chappell parent identified $283 million in revenue, reflecting a 16 percent YoY jump as well as a 10 percent quarterly gain.
Behind the hike, WMG pointed to the CRB’s Phonorecords III decision and an adjacent 27 percent YoY improvement for publishing’s streaming revenue. This streaming growth managed to offset an 11 percent YoY dip for performance ($40 million total in Q2); sync income, at $41 million, was flat YoY but down 11 percent from Q1, according to WMG’s breakdown.
Building upon publishing’s digital expansion, the Magneoton stakeholder Warner Music Group disclosed $1.03 billion in company-wide digital revenue for Q2 (up about nine percent YoY and quarterly), including a 9.5 percent YoY increase for streaming itself.
Also in terms of overarching operations, WMG highlighted a $79 million YoY revenue gain for international markets ($861 million total), against a $52 million YoY gain for the U.S. ($704 million total).
Lastly, in terms of Q2 financial details, WMG reported $297 million in adjusted OIBDA (up 16 percent YoY) and $124 million in net income (down slightly YoY) for Q2 2023. At the time of this writing, the company’s stock was worth $32.55 per share, up 6.5 percent from Monday’s close.
During his company’s earnings call, WMG head Robert Kyncl described streaming services’ price increases as “an encouraging start” and, contrasting past remarks delivered by Spotify CEO Daniel Ek, claimed that platforms needn’t negotiate fresh agreements to raise their prices.
“We do not have a new deal with Spotify,” said Kyncl. “Let me just clarify that up front. We’re not in relationship with the consumers; our DSP partners are. They are free to raise prices at any time without any contractual change. It’s not required in order to do so.”
Separately, the former YouTube exec signaled that WMG acts are poised to put out AI releases sooner rather than later.
“Working with our artists and songwriters,” proceeded Kyncl, “we are leaning in, moving fast, and working with a network of partners including both generative-AI engines and distribution platforms. Many Warner artists are already exploring impactful ways to use generative AI to create, augment, and remix their music. We have some great examples from big names on the way later this quarter.”