Operating income before depreciation and amortization (OIBDA) also presented healthy growth of 14.5 percent to $157 million for the quarter, versus $137 million a year ago. In addition to revenue growth, OIBDA benefited due to the absence of legal settlement costs, which impacted the year-earlier period.
Breaking out revenue, the recorded music operation provided $165 million in OIBDA to $797 million for the quarter, up 8.1 percent from $737 million, while publishing grew to $124 million from $116 million, which means inter segment revenue must have been $4 million during the quarter.
Within recorded music, digital accounted for $402 million, of which streaming accounted for $311 million and downloads for $92 million. That means streaming grew at nearly 47 percent from the $212 million the channel produced in the year-earlier period, while downloads declined 17.3 percent from a year ago when they accounted for $110 million.
Meanwhile, physical formats produced $227 million in revenue, while artist services and expanded rights accounted for $90 million and licensing added $78 million for the quarter.
That compares with $248 million for physical; $83 million for artist services and expanded rights; and $84 million for licensing during the year-earlier period.
This means that the revenue mix shifted to 39 percent streaming; 28.5 percent for physical; 11.5 percent downloads; 11.3 percent for artist and expanded rights; and 9.8 percent for licensing. In the prior year, those totals were: $212 million, or 28.8 percent for streaming; $110 million, or 14.9 percent for downloads; $248 million, or 33.6 percent for physical; $83 million, 11.3 percent for artist services and expanded rights; and $85 million, or 11.4 percent for licensing.
Within publishing, performance revenue at $37 million accounted for 29.8 percent of revenue; digital at $43 million for 34.7 percent; mechanical at $16 million for 12.9 percent; synchronization at $26 million for 21 percent; and other, $2 million, or 1.6 percent.
In the prior year's quarter, those numbers were $43 million, or 37 percent from performance; $27 million, or 23.3 percent for digital; $20 million or 17.2 percent mechanical; $25 million or 21.6 percent for synch; and 0.86 percent for other revenue.
Looking at the revenue breakout another way, the U.S accounted for $396 million, or 43.2 percent of revenue while international operations produced 57.3 percent of revenue, and while that adds up to 100.05 percent that's because it includes $4 million in inter-segment sales that are eliminated from the company's total revenue for the period.
During a conference call with Wall Street analysts, Cooper made clear that one of the company's priorities -- international expansion -- is paying off. Further, he noted that the company's top four markets -- the U.S., the U.K., Germany and Japan -- all grew due to streaming growth.
“Of course, we recognize that our results are benefiting, at least in part, from an improved industry environment," he said. "In calendar '16, the top four recorded music markets all grew, driven mainly by increases in subscription streaming revenue."
On a consumption basis, which includes track-equivalent albums and streaming, Cooper noted the U.S. grew by 3 percent and the U.K. and Germany each grew by 2 percent. Further, he said digital revenue grew by 13 in Japan, while physical declined just 3 percent. But, he added, the music industry is even enjoying growth in a mature streaming market like Sweden -- where streams account for 85 percent of revenue -- with overall revenue increasing 9 percent, including a 10 percent increase from streaming.
He noted that while global subscribers to paid music services has reached 100 million, "that's only one percent of the world's population; it's just a drop in the bucket," which is why he is upbeat about continued growth for the music industry.
“As an industry, we have only fulfilled a fraction of the streaming model’s long-term potential,” Cooper said. “We’re determined to work with our partners to attract the next 100 million subscribers, and beyond.”
While company executives declined to give a sneak preview during the conference call at this year's release schedule, Cooper said they were optimistic about new music from Ed Sheeran (pictured above) and continued performance from Bruno Mars, Twenty One Pilots and the Hamilton soundtrack.
In addition to building its artist roster, Cooper noted that the company had moved to bolster its senior management staffing.
"We promote internal talent, such as Gregg Nadel to president of Elektra Records, Ben Vaughn to president of Warner/Chappell Nashville, and Tony Harlow to president of WEA, our artist and label services division," he said. "We are also bolstering our existing resources with external talent such as Ralph Munsen, our new chief information officer, and Vinnie Freda, in the newly created role of chief data officer... (and) Ole Obermann joined us as chief digital officer at the end of last year.”