warner music group
The Ledger: The Major’s $25B in Revenue in 2021 Is Just the Start
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online. Six years into the global music industry’s recovery, the largest labels and publishers are growing by leaps and bounds. The three major music groups — Universal Music Group, Sony Music Entertainment and Warner Music Group — had combined revenues of $25.4 billion in calendar 2021, up 19.8% from calendar 2020, according to Billboard‘s calculations. That annual growth rate was more than a four-fold improvement from the companies’ 4.7% revenue growth in 2020 after a slowdown in physical goods sales during the pandemic. Combined, the companies had an operating profit was $4.1 billion in 2021, a 44.3% increase, with...
The Ledger: Hits Are Great, But Labels & Publishers Seek Higher Margins Too
There’s little doubt record labels and publishers will continue to improve revenues in the coming years on the backs of streaming subscriptions, stronger internet advertising and burgeoning sectors like social media and connected fitness. But there’s less certainty about how their margins will grow as industry revenues surge. Investors and analysts are making their best guesses. During Warner Music Group’s earnings call on Tuesday (Feb 8), RBC Capital Markets analyst Kutgun Maral asked management asked if recent deals “are indicative of a greater focus on M&A” and if they “are accretive or dilutive to margins.” CEO Stephen Cooper said WMG will “be quite assertive” in seeking deals it believes can be “immediately accretive [to margins].” Lou Dickler, senior vp, controller, added that th...
EBIDTA, AOI, OIBDA, WTF? Why Companies Report Different Financial Metrics
With music companies’ fourth quarter earnings starting to roll out this week, news reports have been filled with the usual alphabet soup of accounting jargon, abbreviations and acronyms. It can get confusing, especially since some of the most visible financial metrics don’t have strict definitions. Spotify, Warner Music Group, Live Nation, SiriusXM and other companies publicly traded in the U.S. adhere to what are called Generally Accepted Accounting Principles set by the Financial Accounting Standards Board. GAAP standards allow investors to reasonably trust companies will fairly represent their business results using the same rules and language. Left to creatively interpret their own finances, companies would have different approaches to measuring their revenue, expenses and liabilities....
The Guetta-verse: Roblox and Warner Music Announce Avatar DJ Set By David Guetta
When you’ve graced the stage of practically every music festival and club short of Mars, like David Guetta has, where else to go but the metaverse? According to a press release, the chart-topping “Titanium” producer has been confirmed to perform a DJ set as his avatar self within the Roblox ecosystem. Created in partnership with Roblox developer Wonder Works Studio and Warner Music Group, Guetta’s innovative DJ set will debut this Friday, February 4th at 4PM PT (7PM ET). “Working on this concert has allowed me to bring an amazing new creation to life with design and production to suit the virtual world,” Guetta said. “We’ve built something that will play host to one of the most unique shows I’ve ever done and I can’t wait for everyone to ...
Chino Moreno’s ††† (Crosses) Ink Deal With Warner Records Ahead of New Album
††† (Crosses), the electronic project of Deftones singer Chino Moreno and multi-instrumentalist Shaun Lopez (of the post-hardcore band Far), are currently working on new music. They’ve now found a label to release the upcoming album after inking a deal with Warner Records. The signing comes after the duo teased that they were in the studio together recording new material back in November. The last music we heard from the group was a one-off 2020 cover of Cause & Effect’s “The Beginning of the End” following six years of inactivity. Lopez shared the label news on Instagram, giving shoutouts to the project’s inner circle: “Very happy to announce that @crossesmusic recently signed a worldwide deal with @warnerrecords. Looking forward to working with such an amazing crew. Hi fives to the b...
Warner Music Group Acquires 300 Entertainment in $400M Deal
300 Entertainment, the independent music company that is home to Megan Thee Stallion, Young Thug, Gunna, Fetty Wap, Highly Suspect and more, has been purchased by the Warner Music Group, the companies announced today (Dec. 16). News of the acquisition — which sources tell Billboard is for around $400 million — was first reported by Billboard earlier this month. As part of the deal, 300 co-founder and CEO Kevin Liles has been appointed chairman/CEO of both 300, which will remain a standalone entity, and Elektra Music Group, which encompasses Fueled By Ramen, Roadrunner Records, DTA, Low Country Sound and Public Consumption. Elektra co-presidents Gregg Nadel and Mike Easterlin will continue to run Elektra, but will now report to Liles moving forward. “At 300, we’re all about freedom — the fr...
Warner Music Sells $540M of Notes to Help Fund Three Acquisitions Worth $710M
Warner Music Group raised $540 million through a sale of 3.75% senior secured notes offering to help fund three acquisitions worth $710 million, the company announced Wednesday (Nov. 17). WMG will use the net proceeds and cash on hand for these acquisitions of “certain music and music-related assets,” or for “general corporate purposes” if it does not close on any of the deals, according to one of its SEC filings. The company has signed non-binding letters of intent for the three deals. WMG has signed non-binding letters of intent for the three acquisitions, which would have added additional revenue and adjusted EBITDA of $42.8 million and $34.4 million, respectively, to the company’s fiscal year ending Sept. 30, 2021. Those gains would represent a 0.8% increase to WMG’s $5.3 billion of re...
Streaming Is Reliable Revenue, So What’s Next for Warner Music and Other Labels?
In WMG’s earnings call on Monday, a word repeatedly came up when analysts probed for insights about the opportunities that await: metaverse. Thank Mark Zuckerberg for that. The term gained widespread attention since Facebook announced its name change its to Meta on Oct. 28 and detailed its plan to create a metaverse, a combination of augmented and virtual reality, where people interact with other users’ avatars in simulated worlds. Other tech titans share Facebook’s vision. Microsoft is also working on a metaverse for its Office products and Xbox gaming platform. Apple is reportedly working on a augmented reality glasses and “mixed reality,” a combination of AR and VR. WMG already has a metaverse play through a January investment in Roblox, a platform that hosts user-generated games. WMG a...
Why UMG’s Public Debut Boosted Warner & Other Music Stocks Too
Demand for UMG shares may have helped two more music companies: the share prices of French music distributor Believe SA and U.S. music rights company Reservoir Media increased 3.1% and 11.6%, respectively, on Tuesday. Investors also appeared hungry enough for UMG to purchase shares of Pershing Square Holdings, which has a 10% stake in UMG, and drive its share price up 5%. Sensing an opportunity, WMG’s owner, Access Industries, sold 2.34 million shares to Morgan Stanley & Co. on Tuesday for an unspecified amount. WMG could benefit from the added liquidity to the market. Although the shares represent less than 0.5% of WMG’s outstanding shares, WMG’s float – shares available for trading – represent about 19% of its shares, according to multiple financial sources. (UMG says its float is 42...
Warner Music Nabs Kristin Burke From Universal to Run Canadian Label
Burke, who is currently executive vp and general manager at Universal Music Canada, where she has worked for more than 20 years, will report to Simon Robson, president, international, recorded music at Warner Music Group. She will succeed Steve Kane, who has served as president since 2004, and was inducted into the Canadian Music and Broadcast Industry Hall of Fame in 2015. (Kane did not respond to a request for comment.) “Kristen has a great reputation across the industry, combining great strategic insight with an instinctive empathy for artists,” Robson said in a statement. Kane, in his own statement, said he knows the company’s “future is in safe hands,” adding that he plans to focus more energy on social justice issues and music. (Kane notoriously has shopped for vinyl every weekend si...
Major Labels Hit Charter Communications With Second Copyright Suit
“Charter has insisted on doing nothing — despite receiving thousands of notices that detailed the illegal activity of its subscribers, despite its clear legal obligation to address the widespread, illegal downloading of copyrighted works on its Internet services, and despite being sued previously by Plaintiffs for similar conduct,” the complaint maintains. The new lawsuit says the labels continued to “monitor and detect infringement” occurring on Charter’s network during the current claim period and sent over 150,000 additional notices identifying the illegal download, copying and distribution of their copyrighted music through BitTorrent and other digital file-sharing services. The notices allegedly flagged the unique IP addresses of what the labels claim are “tens of thousands” of ...
5 Things Warner Music Group’s Earnings Say About the Industry’s Future
“There are tens of thousands of tracks that are uploaded every day to streaming services around the world,” said Cooper. A label such as Warner, he said, helps artists “separate their music and their careers from literally all of this noise.” As for Warner’s finances, looking at trailing 12-month revenue, which removes the effect of any one quarter, Warner improved by 13.2%. Physical sales returned to normalcy, climbing from $51 million in a pandemic-stricken quarter a year earlier to $130 million; the quarter included Record Store Day on June 12, which led to record one-week vinyl sales in the U.S., according to MRC Data (next quarter’s earnings will benefit from the July 22 Record Store Day, the second-highest ever). Growth in streaming revenue was adequate at 22.5% for recorded mu...
