Skip to main content

Warner Music Group Posts $1.6B in Quarterly Revenue as Digital Rises 21%

Streaming and digital across both recorded music and publishing drove growth at WMG in the company's first quarter earnings report

Propelled by double-digit gains across its recorded music and publishing divisions, Warner Music Group set a record for quarterly revenue of $1.614 billion in its fiscal first quarter ended Dec. 31, 2021, according to the company’s earnings report released Tuesday (Feb. 8). That revenue haul represents 21% growth over the same period last year, fueled by a 19% jump in recorded music revenues and 31% in publishing.

Digital was in the driver’s seat, once again, leaping 21% and accounting for over $1 billion of that revenue haul for the quarter and covering 62.1% of total revenue for the company, compared to 61.8% in the prior-year quarter. The recorded music/publishing split of that digital revenue was $870 million/$133 million, the company said.


Recorded music revenue totaled $1.386 billion for the frame, up 19% year-over-year, and was driven by the digital-leading streaming segment, which totaled $836 million for the quarter, up 21%. Physical revenue grew 12% to $195 million, thanks to continued demand for vinyl and other factors. Artist services and expanded-rights revenue increased 29% to $232 million, reflecting an anticipated bump in merchandising and concert promotion revenue following a COVID-slammed 2020. Licensing revenues grew 11.3% to $89 million, which the company attributed to higher synchronization and other licensing revenue. Per usual, the fly in WMG’s recorded music ointment was the downloads and other digital segment, which fell 20% to $34 million for the frame.

The company offered the caveat that some of its recorded music results were impacted by an extra week of reporting, as well as a new deal with an unnamed digital partner. Adjusting for those items, total revenue was up roughly 18%, while recorded music revenue was up 16% and streaming 17%.

Major sellers during the quarter included Ed Sheeran, Coldplay, Dua Lipa and Silk Sonic.

Looking closely at publishing, Warner Chappell Music grew a whopping 31% to $229 million from $175 million the same quarter last year. Breaking down publishing revenue, digital generated $133 million, up 34% from $99 million from the same period last year. With Hollywood back in high gear, synchronization revenues increased to $42 million from $33 million a year before. Mechanical increased to $14 million from $11, thanks to wider business recovery and an increase in physical sales. As a percentage of revenue, digital increased slightly to 58.1% of total publishing revenue versus 56.6% in the prior-year quarter. Performance revenue increased to $38 million from $30 million as bars, restaurants, concerts and live events continued to recover from COVID disruption.

Looking at profit, all those positive metrics helped pump net income for the quarter up 90% to $188 million compared to $99 million in the prior-year quarter, which was impacted by the pandemic. OIBDA (operating income before depreciation and amortization) came in at $320 million versus $267 million in the year-earlier period. Operating income was $239 million compared to $196 million in the prior-year quarter.

“Hitting an all-time high in our 18 years as a standalone company is proof that we’ve never been stronger. At the same time, we’ve never had so much opportunity ahead of us,” WMG CEO Stephen Cooper said in a statement. “Our creative expertise, global agility, and willingness to experiment set us apart from the competition and solidify our important role across the entire music ecosystem. In the coming year, we look forward to welcoming back huge superstars, breaking new artists and songwriters, and seeking out more innovative ways to bring more music to more people in more places.”

Despite an overall strong quarter that showed growth in both streaming and new business models, WMG shares dropped 8.6% to $37.11 on Tuesday morning. One caveat to WMG’s growth figures was the 14-week fourth quarter of 2021 that provided a boost over the prior-year’s 13-week quarter. The extra week was worth about $115 million of revenue when calculated on a pro-rata basis. Adjusted for the extra week, quarterly revenue would have grown roughly 12% rather than 21% as reported.

New segments such as social, gaming and fitness is worth $325 million on an annualized basis for WMG’s labels and publisher, up from $310 million in the previous quarter. It was the first time WMG management had revealed the segments’ value for both recorded music and publishing. Previously, WMG said new business segments were worth $235 million to record labels on an annualized basis.



Q1 Highlights (Year-Over-Year)

  • Total revenue:  $1.614 billion, up 21% y/y
  • Total digital revenue: $1.002 billion, up 21%
  • Recorded music revenue: $1.386 billion, up 19%
    • Digital: $870 million, up 20%
      • Streaming: $836 million, up 21%
    • Physical: $195 million, up 12%
    • Artist services: $232 million, up 29%
  • Music publishing revenue: $229 million, up 31%
    • Digital: $133 million, up 34%
      • Streaming: $129 million, up 37%
  • Net income: $188 million, up 90%
  • Operating income: $239 million, up 22%



In a corresponding earnings call for investors, Cooper touched on the industry’s latest hot potato: Joe Rogan. The label chief carefully addressed an issue that has resulted in several iconic artists from the WMG roster — Neil Young, Joni Mitchell and Crosby, Stills and Nash, respectively — pulling the vast majority of their catalogs from Spotify, the world’s No. 1 music streaming platform, in large part over COVID-19 misinformation spread on Rogan’s popular podcast. (WMG sold its entire stake in Spotify in 2018.)

“Our first inclination is to always support our artists and it is good to see that Spotify is responding to this issue in an attempt to resolve it,” Cooper said. “But they should be the ones that speak about their own position and their policies. Just to be crystal clear: we do business with hundreds of streaming operations around the world. Not only traditional streamers but these new emerging business platforms. We and our artists, broadly speaking, feel very good about those revenue streams that are generated many by a consumption basis. And we, WMG, continue to fight day and night for our artists and songwriters to ensure they are compensated for their work in as equitable fashion as possible.”

Cooper further added regarding Spotify, “Virtually all of our deals fall within a very tight band of economics. When you look at Spotify, they are in the process of building a podcast business. The economics of that business are different than the economic relationships that we have with Spotify on a music side.”

While a news release for the earnings lacked the terms “Web3” or “NFT,” the company made sure to tout its aggressive push into the metaverse during the call. WMG has led the way on partnering and investing in the metaverse and Web3, when it comes to the major labels at least, spearheading a number of partnerships with next-gen startups including green NFT-maker OneOf, avatar tech company Genies, immersive tech startup Wave, and a very early investment in Dapper Labs, the blockchain startup that powers NBA Top Shot, the league’s NFT marketplace.

“The emergence of Web3 is going to amplify the importance of music labels and publishers,” Cooper said. “This is an area … that will require organizations like us that have the financial resources and the global footprint to be able to help our songwriters not only navigate this universe but navigate successfully their presence inside Web3 and their revenue alternatives. I think labels and publisher will become more important as the world become more complex.”