Warner Music Group Corp. today announced its third-quarter financial results for the period ended June 30, 2007.
For the third quarter of fiscal 2007, revenue slipped 2% to $804 million from $822 million in the same period last year, or 5% on a constant-currency basis. This decline was driven by a “challenging Recorded Music industry environment as the shift in consumption patterns from physical sales to new forms of digital music continues.” Warner stated that declines in the company’s physical Recorded Music revenue were only partially offset by increases in Music Publishing and digital Recorded Music revenue. Domestic revenue was down 1% while international revenue declined 4%, or 9% on a constant-currency basis.
Digital revenue increased to $119 million, or 15% of total revenue in the quarter, up 29% from $92 million in the prior-year quarter and up 7% sequentially from $111 million in the second quarter of fiscal 2007.
“We are transforming Warner Music Group to a music-based content company with a more comprehensive approach to participating in artist revenue streams to drive our long-term success,” said Edgar Bronfman, Jr., Warner Music Group’s Chairman and CEO. “Despite a challenging industry environment, we achieved several milestones this quarter which validate our A&R strategy. According to sales data released this quarter, our global market share for calendar year 2006 improved, moving us up to the third-largest global recorded music company. We also reached a WMG 10-year record for U.S. album share for both the quarter and first half of 2007.”
Full press release here.
Take a wild guess as to which online digital music store is responsible for the vast majority of 15% of Warner Music’s revenue?
The Middlebronfman had better keep that thought very handy when approaching Apple CEO Steve Jobs in the next round of iTunes Store negotiations.
Hey, Eddie, it’d be best to keep your pipe dream of iPod royalties to yourself from now on. It ain’t gonna happen.
You might want to start stripping off that DRM, too.
Related articles:
Middlebronfman kills Warner Music dead – May 11, 2007
What Apple and the music labels are discussing in iTunes Store negotiations – May 09, 2007
Apple CEO Steve Jobs seeks to end DRM in new iTunes talks with labels – May 06, 2007
Some music labels’ execs still think they can stop the inexorable DRM-free tide – May 04, 2007
Apple tells iTunes Store partners: you can offer DRM-free music and music videos soon – April 27, 2007
Apple enters re-negotiations with music labels in position of strength, to push for DRM-free music – April 20, 2007
EMI’s Nicoli on DRM-free iTunes: ‘We have to trust our consumers,’ Apple’s Jobs: ‘right thing to do’ – April 02, 2007
Kudos to Steve Jobs and Apple for having courage to call for end of DRM and making it happen – April 02, 2007
Apple: Higher quality 256 kbps AAC DRM-free music on iTunes Store coming in May – April 02, 2007
Warner’s DRM-loving Middlebronfman warns wireless industry it may lose music market to Apple iPhone – February 14, 2007
Warner’s Middlebronfman: Jobs’ DRM-free music call ‘without logic and merit, we’ll not abandon DRM’ – February 08, 2007
Apple CEO Steve Jobs’ posts rare open letter: ‘Thoughts on Music’ – calls for DRM-free music – February 06, 2007
Warner’s Middlebronfman: ‘We sell our songs through iPods, but we don’t have share of iPod revenue’ – October 05, 2005
Warner music exec discusses decapitation strategy for Apple iTunes Music Store – September 28, 2005
Warner CEO Bronfman: Apple iTunes Music Store’s 99-cent-per-song model unfair – September 23, 2005
“participating in artist revenue streams”
therein lies one of the bigger issues in the music industry. When participating means keeping the lions share of revenue from someone else’s creativity, it redefines the word participate. The only creativity the Recording Industry knows is the accounting kind
So now he has nothing to complain about. iTunes is pulling in the profits, record profits even. Steve Jobs has proved his case and Eddie doesn’t need any revenue from iPod sales, not that he would get any anyways. Now he has no arguments and should shut up and open his eyes to DRM free downloads and rake in the money and stop blaming Steve Jobs and there customers who have only brought in the money to the likes of Middlebronfman and Warner.
Time to learn a new word, “monopsony”. A monopsony is like a monopoly in reverse. It’s when there’s only one dominant buyer of a product. It’s iTunes, is what it is. As iTunes grows and grows and no other digital store comes up to offer serious competiton, and as iTunes sales comprise bigger and bigger percentages of music companies’ revenue, Steve Jobs will have as much control over Warner, Sony, et al. as he wants. Apple will have the same power over music “suppliers” that Wal-Mart has over its suppliers. It’s no wonder the music companies are trying everything they can think of to stave this off.
14.9999% of your income coming from one source gives that source significant leverage!
“a more comprehensive approach to participating in artist revenue streams” – Translation we’re bending the artists over even further just to support our ailing business model.
Revenue slipped by 2%, costs must be down more. No CDs to press, bumph to print, distribution costs. More profit, or did they waste it on some other ‘costs’? Can’t be bothered to wade through the figures but it looks like they did pretty well.
It is amazing how badly compressed digital music sounds. I’ve been listening to my iTunes catalogue encoded in Apple Lossless and connected directly to my stereo for the last few months. The other night I threw a few CDs into my CD player and was blown away by how vastly far superior the sound is. Digital music has a loooooonnnngggg ways to go.
Hey Jump – I notice that when I DJ off my MacBook compared to CDs but when the dancefloor is packed and bodies are grinding, they don’t seem to care
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I’ve used my Onkyo/Polk Audio stereo system exactly twice in the last six months as it’s just easier to turn on iTunes on my MacBook. Plus, my roommates prefer that since my big stereo is REALLY loud.
Their profits would be higher if they didn’t decide to renew their iTunes licence monthly.
What nonsense! How can “Lossless” files sound different than the CD?
Nice trolling, Jump
Apple Lossless is a _lossless_ format. Meaning that the sound is exactly like from a non-compressed file (i.e. WAV) or from a CD!
In case you weren’t trolling, maybe you want to check the quality of the audio system that you use to play Apple Lossless files