Warner Music Losses Narrow: 60% Of Artists Have 360 Deals, Spotify ‘Traction Is Ecouraging’
In its first earnings call since acquisition by Access Industries, Warner Music Group reported narrowing losses of $46 million for the fiscal third quarter, compared to a $55 million loss a year ago. Revenue declined 1% on a constant currency basis.
During the call, CEO Edgar Bronfman said 50% of revenue came from "areas of the business that did not exist in 2004". 60% of currently signed WMG artists are signed to 360 or expanded rights deals, according to Bronfman.
DIGITAL REVENUE, SPOTIFY & LIMEWIRE:
Total digital revenue was $203 million up 13% from the prior-year quarter, and up 9% on a constant-currency basis. U.S. digital music revenue grew to $108 million, or 47.6% of total domestic recorded music revenue, up from 40.9%. On Spotify's U.S. launch "early traction is encouraging," according to Bronfman, as is European conversion to paid subscribers.
Thanks to WMG's share of the Limewire settlement, operating income before depreciation and amortization of $77 million was up 20% from the prior-year quarter. Operating income before depreciation and amortization (OIBDA) of $77 million was up 20% from the prior-year quarter. LimeWire settlement had a positive $.08 per share impact in the quarter, but were not enough to offset a net loss of $.30 per share.
WMG will continue to hold earnings even though it is now a private company because some bond debt is still held publicly. The company which was purchased for $3.3 billion last month, has more than $2.27 billion in debt.
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