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The holidays were good to Warner Music Group. Key releases by Michael Buble, Nickelback and the Black Keys helped Warner post flat revenue of $779 million in the fourth quarter of 2011 and first of the company’s fiscal year. Operating earnings (ignoring expenses for depreciation and amortization) improved to $102 million from $90 million. Free cash flow improved to $14 million from negative $179 million. <\/p>\n
In other words, Warner spent a bit less to generate the same revenue and ended up with a little more in its pocket. And in this day and age, maintaining revenue from one year to another is something of a success story. <\/p>\n
Recorded music revenue dropped slightly to $661 million from $662 million. Download and subscription revenue were “strong” but non-traditional revenue fell due to a slowdown in the company’s European concert promotion business. Growth in digital revenue “was partially offset” by the decline in demand for physical product. Revenue at Warner’s publishing division rose 3% to 123 million on the strength of performance revenue. <\/p>\n
Total digital revenue increased to $219 million, or 28.1% of total revenue, from $187 million, or 24% of total revenue. Digital represented 31% of recorded music revenue during the quarter, up from 26.9% a year earlier. Digital accounted for 44.6% of domestic recorded music revenue, up from 38.6% in the prior-year period. <\/p>\n
The company disclosed it incurred $3 million of expenses related to its attempted acquisition of EMI’s recorded music division. Universal Music Group won that bid, although former CEO Edgar Bronfman Jr. has said Warner will seek to prevent the two companies from merging to create a “super-major” record company. Warner also incurred $7 million in severence charges — $5 million in recorded music and $2 million in the corporate division.<\/p>\n
Source: Billboard<\/p>\n","protected":false},"excerpt":{"rendered":"
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