Not satisfied with signing up it’s music and video content to the most successful US video streaming website of 2009, Vevo, WMG has done a deal with internet TV streaming site Hulu for access to the same content.
The agreement brings an artist-focused online video experience that features music videos, artist interviews, live concerts and rare behind the scenes footage from WMG’s world-renowned artists and labels including Atlantic Records, Rhino Records and Warner Bros. Records.
This is a pretty agressive drive towards monetising WMG’s content online, and a sign the big 4 are beginning to adapt and respond to the loss of physical sales and the rise of file sharing, instead of just digging their heels in and waiting for the courts to prosecute a solution for them.
Warner Music Group just posted their Annual 10K with the SEC (click on the thumbnails to enlarge). Revenues are down, and the company has posted a -$77 million dollar loss for the year: double what they lost last year (-$35 million), but better than they did in ‘05 (-$110 million). They’ve managed to shave 5% off their administrative costs, and there’s a marked increase in their digital revenues, up from $599MM to $656MM, which nevertheless fails to cover the drop in lost physical sales. Really it’s the same story we’ve been hearing from the majors for the last few years – the focus is gradually shifting across to digital music, and physical revenues are dwindling away, meaning that the big 4 are making less money and having to downsize their infrastructure. I’m absolutely convinced that after a period of shrinking like this, the big guys will return to profitability, and the quicker they shift their focus across to maximising digital and live revenues, the quicker this will happen.
In a report to shareholders this morning, Warner Music Group revealed that in the quarter ending June 30th, 2009, total revenue decreased 9.3% and operating income from continuing operations declined 51%. Total losses from continuing operations swelled to $37 million from $9 in the prior year quarter.
WMG improved its financial position during the quarter with a $1.1 billion offering of secured notes which the company used to pay off previous loans. But the new new notes carry a hefty 9.5% interest rate and come due in just 7 years
This morning’s SEC filing showed:
- Total revenue of $769 million decreased 9.3 % from the prior year quarter.
- Digital revenue was $175 million or 23% of total revenue in the quarter up just 1% from the second quarter and up 5%f rom $166 million in the prior year quarter.
- Operating income from continuing operations declined 51% to $25 million compared to $51 million in the prior year quarter.
- Operating income before depreciation and amortization (OIBDA) fell 22% to $90 million from $116 million in the prior year quarter.
- Loss from continuing operations was $37 million or $.25 per diluted share compared to a loss from continuing operations of $9 million or $.06 per diluted share in the prior year quarter.
- Interest expense this quarter included $18 million or $.12 per diluted share of previously unamortized deferred financing fees related to the company’s senior secured credit facility. These fees were written off in the current quarter when the company repaid the credit facility in full in connection with its senior secured bond offering.
Read the full filing here.
Not satisfied with signing up it’s music and video content to the most successful US video streaming website of 2009, Vevo, WMG has done a deal with internet TV streaming site Hulu for access to the same content.
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