Warner Music Group (WMG) have already made $2.7 billion this year, thanks streaming
Warner Music was sold for $2.6 billion in 2004, and now roughly ten years later WMG have made more than that in 7 months.
So if you haven’t noticed music streaming is massive, so massive in fact that it’s creating the biggest surges in the music industry for 20 decades. Independent musicians suddenly have a voice thanks to the internet, and thanks to streaming services both indie artists and the major labels have incredible global platforms for their music.
Following Sony’s reveal last week that their profits are rising 20% year on year, Warner are now showing major results from this years music revenues. Warner Music Group (WMG) have reported $2.7 billion in recorded music revenues so far this year, and we’re only just passed halfway through the year.
A lot of this can be put down to the boom of music streaming services, which stepped in as a profitable alternative after internet piracy ripped the industry apart. This comes as Warner are currently, reportedly, in the process of signing a new contract with Spotify that will likely involve some form of exclusivity for new releases, similar to Spotify’s deal with Universal. In return Warner will likely concede to a slight cut in revenue percentages, giving Spotify more hope of becoming profitable.
It’s a giant turnaround for Warner and a testament to the effect streaming is having on the music industry around the world. Just 12 years ago in 2004 Time-Warner ditched WMG in a $2.6 billion sale to an independent entity. Time-Warner are likely kicking themselves now. In 2011 WMG was sold again for $3.3 billion to Len Blavatnik who has seen Warner sales rise 41% since his purchase.
In comparison to the same time last year, Warner stood at a $7 million loss in this same spot. Now Warner have reported a $143 million net profit, a massive turnaround. Whilst times are looking up for WMG massively they are still in the shadow of $2.797 billion in debt.