On a June 30th earnings call, CEO Steve Cooper announced Warner Music Group Q3 2022 revenue. Among the highlights, the CEO spoke about the focus on streaming, their largest revenue source, mentioning the substantial space for both subscriber growth and subscription fee increases in the sector.
Total revenue in the quarter was over $1.4 billion. This represents year-over-year growth of approximately 7% and 12% on an as-reported and constant currency basis compared with an incredibly strong Q3 in 2021. Recorded music revenue was approximately $1.19 billion, an increase of 8.5% from the prior year with streaming revenue up 2.7%. Recorded music streaming revenue grew by 9.2%. Artist services continued to show impressive recovery with revenue growth of 55.7%, while licensing was up 8.7% and physical was up approximately 2%. Publishing had a very strong quarter with revenues of $245 million, approximately 35% more than the prior year quarter.
Cooper made specific mention of the company’s shift to becoming a truly global music enterprise. Taking a two-pronged approach: growing local expertise and talent, while making targeted investments in forging partnerships with local best-in-class operators. Pointing out their in 2014 strategy, acquiring one of the largest independent catalogs in China, Gold Typhoon, and striking a wide-ranging partnership with Tencent.
In 2014, China was the 19th ranked music market in the world. Last year, it was in sixth position and climbing. “Deals made a number of years ago have been critical to us being in the pole position to capitalize on continued growth in China, where our revenue is seven times what it was in 2014. We continue to spot the markets that are going to ignite and deploy a bespoke strategy for each one.”
Cooper highlighted how the company’s global music strategy has been strengthened with the past launch of Warner Music in India, and their organic growth market share in Brazil. More recently, with collaborations that include Kanawat and Rotana in the Middle East and Chocolate City and Africori in Nigeria and across Africa. The company’s latest addition in Q3 was the Warner Music Israel launch, another Middle Eastern country with a fast-growing market with real global potential.
Re-affirming WMG´s commitment to innovation, Cooper spoke about how being at the intersection of art and tech is helping them create a bright future for artists and songwriters. He emphasized that they’re constantly experimenting with ways to improve, expand and diversify their revenue streams, reminding the audience they became the first major music entertainment company to adopt SoundCloud’s fan-powered royalties model, which pays artists based on individual users’ streaming habits.
“We’ve established a reputation as the company to come to first if you want to do anything really groundbreaking in music. We continue to harness the tools, tech and protocols that collectively make up Web3. By constantly learning and evolving, we are simultaneously strengthening our role as the connective tissue between fans and artists by unlocking new opportunities in these rapidly changing environments. Here are just a few examples of our many recent initiatives.” Said Cooper.
Chief Financial Officer Eric Levin reported, “The total company streaming revenue increased 6.5%, driven by growth across both segments. Adjusted for the one time items, total revenue and streaming growth were 14.9% and 10.3%, respectively. Our job is to maximize the performance of that area with great releases and great marketing campaigns. And we’re thrilled that the largest part, the lion’s share of our subscription revenue of our streaming revenue, which is subscriptions continues to grow solidly in the double digits.”
Levin finished the call pointing out goals for the Q4. Mentioning WMB will continue to be innovative, an early adopter, and an early partner with new digital products and platforms, helping them develop their products that integrate music in thoughtful ways.
