By Jem Aswad
Executive Editor, Music
The quarter ended March 31 was a tough one for Warner Music Group, as its quarterly revenue dropped 1% over the same period last year and net income was down almost 63%.
On the company’s earnings call Thursday morning, CEO Robert Kyncl pointed to a lighter release schedule, market share loss in China, and an unflattering comparison to last year’s results for the same quarter, while looking ahead to the company’s current chart success with new artists like Benson Boone, Teddy Swims, Alex Warren, Ovi on the Drums, the Marias, Ravyn Lenae as well as expected releases from more-established acts like Ed Sheeran and Bruno Mars.
Related Stories
Kyncl also pointed to the company’s increased investment in A&R, its market share in new releases and new technologies like Pulse, announced Wednesday,
Popular on Variety
The company reported overall revenue of $1.48 billion and recorded music revenue of $1.175 billion, a 1% drop, for the quarter. Publishing revenue was up 1% to $310 million, while net income was $36 million compared to $96 million in the same quarter last year, owing to lower recorded music revenue, a $34 million drop due to exchange rates, and an $11 million tax increase. Total digital revenue slipped 1% with streaming revenue flat. Adjusted operating income before depreciation and amortization dropped 3% to $303 million.
In constant currency, overall quarterly revenue rose 1%, although recorded music and publishing declined by 2% and 5% respectively.
“Our strategy is starting to bear fruit, with our strongest chart presence in two years,” Kyncl said in a statement. “As a result, our true strength this quarter was partially obscured by challenging comparisons with last year’s outperformance. As we replicate our strategy across other labels and geographies, and drive a virtuous cycle of greater reinvestment, we expect to deliver lasting value for artists and songwriters, and sustained growth and profitability for shareholders.”
A Variety and iHeartRadio Podcast
The Business of Entertainment