Warner Music Group has a hole where Michael Buble "Christmas" CD sales used to exist. The company's recent acquisition of Parlophone and other EMI assets will help fill that void and them some.
Warner revenue dropped 1% to $769 million in the quarter and its net loss grew to $80 million in the quarter ended December 31, according to earnings the company released Thursday. It was the last earnings Warner would report without the addition of Parlophone and other EMI assets it acquired
last week from Universal Music Group. Warner, with the purchase, will add to its roster Coldplay, David Guettta, Duran Duran, Iron Maiden, Kylie Minogue and Radiohead, to name just a few of the artists.
Warner did its best to highlight the quarter's positive aspects ended Dec. 31, 2012. Early in Thursday morning's earnings call, CEO Stephen Cooper pointed out the difficult year-over-year comparison due to tremendous Michael Buble sales in the holiday quarter of 2011. He also noted total revenue had increased when measured at constant currency, which removes currency fluctuations. But like all other music companies, Warner is tasked with following a hit with another hit (or it can buy the market share). And like all other financial statements, Warner's are not reported at constant currency.
Total digital revenue rose 16% to $255 million, or 33.2% of total revenue, from $205 million in the prior-year quarter. Domestic digital music revenue was $128 million, or 49.4% of total domestic recorded music revenue compared to 44.9% a year earlier. Physical revenue decreased 12% to $300 million from $341 million.
Music publishing revenue declined 4.1% to $116 million. Music publishing digital revenue increased 27% to $19 million due to gains in downloads, subscriptions and streaming services. That digital gain more than offset the 21.2% decline in mechanical royalties related to the decline in physical sales.
Artist services and expanded rights revenue remained flat at $60 million. Licensing revenue increased 13.2% to $60 million from $53 million.