Warner Music Group Proving to be King
From Delisting To Proving King
From the ungraceful fall off the Wall Street listing the last decade and posting billions in losses, Warner Music Group (WMG) is coming back bigger and stronger than ever. In 2004, Time Warner chose to offload its record label to an investor group for a staggering $2.6 billion deal including artists such as Metallica and Linkin Park among another 800 artists as it was no longer economically feasible.
Fast forward from 2004 to now, and WMG is proving king on the back of Spotify. An influx of cash can all be appreciated by the streaming industry, more specifically on Spotify. WMG owns 3.8% stake of Spotify, and with an increase of listeners choosing Spotify, dollar signs are in everyone’s eyes.
To ice the cake even more, WMG and Spotify have been working on some killer contracts that will allow WMG to reap even more concession benefits.
Year-To-Date Revenue $2.66 Billion
WMG just released its fiscal third quarter results and all appears sunny. With a YTD revenue of $2.66 billion, it’s a pleasant change for the company that sold for less in ’04 at a price tag of $3.3 billion. Since the acquisition of the group by billionaire Len Blavatnik, sales have increased 41%.
What’s to thank for most of the gains? Streaming. Roughly $360 million of the gains is strictly backed by streaming, thanking Spotify for a majority of it.
Total revenue for the quarter grew by 13.1%, digital revenue up by 30.2%, and net income was up $142 million compared to a loss in the prior-year quarter of $7 million.