Warner Music Group has issued its financial results for the fiscal second quarter to March 31, 2022.
Total revenue increased by 10.1% (13.2% at constant currency) year-on-year to $1.376 billion.
Recorded music revenue was up 8.3% (11.4% at constant currency) to $1.147bn.
During this fiscal year, Warner Music Group is factoring in the impact across its 2022 financial performance from a licensing deal last year with one of its big digital partners. As a result of the impact of that deal, Q2 recorded music streaming growth was up 7.5% year-on-year (9.9% at constant currency).
That performance is down on the 23.2% increase (20.3% in constant currency) in streaming revenue in Q2 2021. But once the adjustment for the digital deal is calculated, WMG’s Q2 2022 streaming revenue increase came out at 12.3% (15% in constant currency). During the same period, UMG streaming revenue was up 14.6% at constant currency.
Adjusted for the impact of that new digital deal, recorded music revenue was up 11.6% (14.8% in constant currency). Digital revenue grew 6.3% (8.8% in constant currency) due to the strong performance of new and carryover releases, as well as revenue growth from emerging streaming platforms.
Digital revenue represented 70.1% of total recorded music revenue versus 71.4% in the prior-year quarter
Across recordings and publishing, digital revenue represented 67.7% of total revenue in the quarter, compared to 68.8% in Q2 2021. The decrease is due to the partial recovery of artist services and expanded-rights revenue, which was impacted by Covid in the prior-year quarter and increased 19.5% (24.8% in constant currency) in Q2. Licensing and sync revenue also recovered and contributed to digital edging down as a proportion of total revenue.
Licensing revenue increased 19.4% (23.1% in constant currency), mainly due to higher synchronisation activity. Physical revenue grew 3.4% (8.0% in constant currency) primarily due to an increasing demand for vinyl. Major sellers included Ed Sheeran, Michael Bublé, Dua Lipa and Red Hot Chili Peppers (pictured).
Recorded Music operating income was $189 million, up from $184m in the prior-year quarter.
WMG’s unique combination of scale and agility gives us, our artists and our songwriters an edge
Music publishing revenue increased 19.8% (23.0% in constant currency). Digital revenue increased 22.1% (25.7% in constant currency) reflecting the continued growth in streaming, including emerging streaming platforms, and timing of new digital deals.
Publishing streaming revenue increased 19.6% (23.2% in constant currency). Digital revenue represented 55.2% of total music publishing revenue versus 54.2% in the prior-year quarter.
Synchronisation revenue increased due to higher commercial licensing activity. Performance revenue increased as bars, restaurants, concerts and live events continued to recover from Covid disruption. Meanwhile, mechanical revenue’s increase was driven by strong physical sales.
Music publishing operating income was $38m compared to $22m in the prior-year quarter.
Warner Music’s total operating income was $166m compared to $151m in the prior-year quarter. OIBDA was $255m, an increase from $228m in the prior-year quarter.
Steve Cooper, CEO, Warner Music Group, said: “Warner Music Group’s unique combination of scale and agility gives us, our artists, and our songwriters an edge in music’s ever-expanding universe of opportunity. We continue to build our unparalleled artist development expertise, our differentiated approach to global expansion, and our ground-breaking commitment to innovation at the intersection of music, gaming, social and fitness. We’re equally excited about the amazing new releases we have lined up for the rest of the year, and the possibilities on the horizon.”
“The underlying health and resilience of our business is reflected in the diversified revenue growth that we delivered in the second quarter,” said Eric Levin, CFO, Warner Music Group. “While our core business continues to flourish, new growth vectors are constantly emerging. We look forward to driving value for our shareholders and are well-positioned to capitalise on the robust trends taking place in our industry.”