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.

wmg top line

WMG 10K revenue