Warner Music Sales Down 11 Percent; Could Have Been Worse
by Peter Kafka
Posted on February 5, 2009 at 5:04 AM PT
The good news for Warner Music Group (WMG) executives: Their fourth quarter was better than the one that their rivals at Sony Music Entertainment (SNE) posted. The bad news: That’s still a lousy quarter.
And that’s no surprise. By all accounts, the music industry’s slide accelerated at the end of 2008, so the only question here is how bad each major label did. In Warner’s case, it saw sales drop 11 percent, while operating income dropped 34 percent. U.S. sales dropped 18.8 percent.
Warner reminds us that it sold a lot of Josh Groban discs a year ago, and it didn’t do that this year, so its results are skewed. Skeptic’s answer: Shouldn’t you have hit records every year?
In any case, some more could-have-been worse news: After you strip out a one-time gain, Warner lost nine cents per share last quarter–which is better than the 15 cents per share Wall Street thought it would lose.
And yes, digital sales continue to increase, though more slowly than in the past. Warner recorded $142 million in digital revenue, which is up 20 percent compared to the same quarter the year before. But a year ago, Warner had posted a 41 percent gain in digital. Yet another reason to look askance at Apple’s (AAPL) boast about “record” sales at its iTunes store last Christmas.
Given that Warner is the only publicly traded big music company, its results are worth paying attention to. Glenn Peoples at Coolfer has done a nice job with a transcript.
