WMG Swings To Loss On Severance Charges, Weak Demand; Digital Rises 10 Percent

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WMG Swings To Loss On Severance Charges, Weak Demand; Digital Rises 10 Percent

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General music industry woes, along with $14 million in severance costs, pushed Warner Music Group (NYSE: WMG) to a net loss in Q3. In the meantime, revenues were barely up one percent to $861 million and loss from continuing operations was $18 million. The label made layoffs from several divisions in the quarter.

Amid WMG’s general weakness in Q3, digital revenues continued to rise. The segment’s revenue was $184 million, a 10 percent gain year-over-year. Digital comprised 21 percent of total sales in the quarter - up five percent from the previous quarter. Over the full year, WMG has now made $703 million from digital, also 10 percent up from last year.

—Recorded music: Just as EMI Group has found, consumer music sales are actually up 0.3 percent - but that’s thanks to an offset from 16 percent overseas growth (especially Europe and Asia); domestic U.S. sales were down four percent. Digital made up 24 percent of this (£171 million), over a third of which ($105 million) is from U.S.

—Music publishing: A 3.8 percent increase to $162 million, with digital growing even faster, by 46 percent to $16 million—likely the result of increased licensing by online services and other users of music.