QUOTE AND NEWS
Reuters  Jul 11  Comment 
Online music sharing service SoundCloud Ltd is close to a deal with Universal Music Group, Sony Music Entertainment, and Warner Music Group for licenses to continue playing their songs...
TechCrunch  Jul 2  Comment 
 In what is the largest VC round in a French startup of all time, BlaBlaCar just raised a $100 million round led by Index Ventures, with existing investors Accel Partners, ISAI and Lead Edge Capital also participating in the round. Previously,...
DailyFinance  Apr 8  Comment 
NEW YORK, NY -- (Marketwired) -- 04/07/14 -- WMG Acquisition Corp. (the "Company"), a wholly owned subsidiary of Warner Music Group Corp. ("Warner Music Group" or "WMG"), today announced that as of 1:00 p.m. on April 7, 2014, it had received...
DailyFinance  Mar 26  Comment 
NEW YORK, NY -- (Marketwired) -- 03/26/14 -- Warner Music Group Corp. ("Warner Music Group" or "WMG") today announced that through its wholly owned subsidiary WMG Acquisition Corp. (the "Company") it has commenced a private offering (the...
Forbes  Mar 7  Comment 
There's a couple of schools of thought when it comes to enabling enterprise applications to work in a mobile world. The first school of thought, perhaps typified by Netflix of Warner Music Group, is that legacy systems are simply too inflexible to...
SeekingAlpha  Feb 6  Comment 
Warner Music Group Corp. (WMG) F1Q2014 Earnings Conference Call February 06, 2014 8:30 AM ET Executives James Steven – Senior Vice President-Communications and Marketing Stephen F. Cooper – Chief Executive Officer Brian...
DailyFinance  Jan 31  Comment 
NEW YORK, NY -- (Marketwired) -- 01/31/14 -- Warner Music Group Corp. will release its financial results on Thursday, February 6, 2014 for the first fiscal quarter ended December 31, 2013 and will hold an earnings update conference call that...
SeekingAlpha  Dec 12  Comment 
Warner Music Group Corp (WMG) F4Q 2013 Results Earnings Call December 12, 2013 8:30 AM ET Executives James Steven - Senior Vice President, Communications and Marketing Steve Cooper - Chief Executive Officer Brian Roberts -...
DailyFinance  Dec 12  Comment 
NEW YORK, NY -- (Marketwired) -- 12/12/13 -- Quarterly revenue grew 7% on a constant-currency basis including the Parlophone Label Group acquisitionDigital Recorded Music revenue growth more than offset physical revenue decline for the fiscal...
DailyFinance  Dec 6  Comment 
NEW YORK, NY -- (Marketwired) -- 12/06/13 -- Warner Music Group Corp. will release its financial results on Thursday, December 12, 2013 for the fourth quarter and fiscal year ended September 30, 2013 and will hold an earnings update conference...




RELATED WIKI ARTICLES
 
TOP CONTRIBUTORS

Warner Music Group (NYSE:WMG) is the world's third largest recorded music and music publishing company.[1] Its major domestic record labels include Warner Bros. Records and The Atlantic Records Group.[2] WMG's extensive recorded music catalog includes 28 of the top 100 U.S. best-selling albums of all time, (more than any other recorded music company), including the number one best-selling U.S. album of all time, The Eagles: Their Greatest Hits 1971-1975.[1] Signed artists range from Madonna to the Red Hot Chili Peppers, Josh Groban to Missy Elliott, and R.E.M. to the Trans-Siberian Orchestra.[2] The company earned $3.5 billion in revenue and $169 million in net income in 2009.[3]

Despite these strengths, WMG's revenues have been flat over the past few years due to declining CD sales and illegal music downloading, two factors which have offset gains from increased digital sales. The company's future success will depend on how successfully it adapts to the "digitalization" of the music industry. In addition to selling audio and video content through iTunes and other online media distribution centers, WMG has signed deals with sites like YouTube to receive advertising revenue from its posted video content. The company has also expanded its relationship with cell phone providers in an effort to get its digital content to more wireless subscribers.

Company Overview

Business Segments[2]

  • Recorded Music (82% of net sales) - The recorded music division oversees the sale, and licensing of music in a number of physical (CDs, DVDs) and digital (downloads, ringtones) formats. Major music companies like WMG have built up substantial recorded music catalogs that they can exploit for years after they stop releasing an artist's new albums, whether through compilations, box sets, special package releases, etc. In a given year, these catalog albums usually comprise around 40% of WMG's recorded music sales.
  • Music Publishing (18% of net sales) - WMG's music publishing segment owns and acquires the rights to musical compositions, which they then market to others who pay a royalty for their use. Warner holds over a million copyrights from more than 65,000 composers and songwriters.

Business Growth

FY 2009 (ended September 30, 2009)[3]

  • Net revenues remained flat at $3.5 billion. A 16% decline from physical products was offset by a 10% increase in digital products.
  • The company incurred a net loss of $169 million, down from the net gain of $60 million earned in the previous year

Trends and Forces

  • Maturation of the CD market leads to declining physical sales for music industry: From 1990 to 1999, the U.S. recorded music industry grew at a compound annual growth rate of 7.6%, a trend that was fueled in part by the replacement of vinyl records and cassettes with CDs. Since then, it's estimated that yearly sales of physical music product in the U.S. have declined at a compound annual growth rate of 6%. The recorded music industry as a whole has also seen negative growth since 1999, largely because of digital piracy, but also partly because of declining CD sales. WMG has not managed to escape this trend, as evidenced from the graph above showing a steady decline in revenue from physical sales over the past few years.[4]
  • WMG exploits growth of new formats for recorded music distribution: As the CD market has waned, the market for MP3 players like the ipod and digital music formats has exploded. Although we are still in the early stages of the music industry's digital revolution, Warner has already begun exploiting new avenues of media distribution. It has deals with online stores like iTunes to sell single tracks, albums, and video content. In addition, Warner was one of the first major music companies to enter into agreements to distribute its music video library on video sharing sites like YouTube in return for a chunk of the advertising revenue generated from those videos. The company has also expanded into the cell phone market with ringtones, track downloads, and music video downloads, a strategy it hopes will provide a hedge against the more insecure online market where piracy abounds. Digital sales comprise 25% of the company's net sales.[5]
  • WMG and competitors try to contain digital piracy: Illegal music downloading remains the music industry's biggest threat. The International Federation of the Phonographic Industry (IFPI) approximates that almost 20 billion songs were illegally downloaded in 2006.[6] WMG was originally a firm supporter of digital rights management technology (DRM), which prevents consumers from sharing their iTunes songs with friends. However, because of strong consumer dislike for DRM that had a greater negative impact on sales than it did a positive impact on piracy, Warner has begun to distribute its catalog DRM-free. Nonetheless, the future growth of the company and those like it will depend on their ability to find an accepted way to combat digital piracy. In addition to digital piracy, major record labels also face industrial piracy, which involves the mass production of illegal CDs in factories, mostly in developing countries. These CDs are sold at significantly lower prices than their legal counterparts.[7]

Competition

WMG's closest competitors are its rivals in the "Big Four" consortium: Sony BMG, EMI Group, and Universal Music Group. All four operate in recorded music and music publishing.

The "Big Four" account for 74% of all retail music sales globally.[8]

Notes

  1. 1.0 1.1 WMG 2009 10-K "Our Company" pg. 1
  2. 2.0 2.1 2.2 WMG 2009 10-K pg. 6-11
  3. 3.0 3.1 WMG 2009 10-K "Selected Financial Data" pg. 41
  4. WMG 2009 10-K "Industry Overview" pg. 17-19
  5. WMG 2009 10-K "Revenues" pg. 50
  6. WMG 2007 10K, Item 1, pg.16
  7. WMG 2009 10-K "Capitalize on Digital Distribution" pg. 4-5
  8. WMG 2009 10-K "Competition" pg. 15
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki