Warner Music Group beat analysts’ revenue expectations today, posting quarterly revenues of $1.63 billion for its fiscal Q4 (calendar Q3).
But it was the company’s subscription streaming results that delivered a dose of optimism for any observers doubtful about the growth trajectory of streaming revenues at major music companies in 2024.
As we reported this morning, WMG revealed today (November 21) that for the fourth straight quarter, in the three months to the end of September, it saw double-digit YoY recorded subscription streaming growth on a normalized basis.
The company’s subscription streaming revenues grew 10.6% YoY on a normalized constant currency basis to $645 million in calendar Q3 (WMG’s fiscal Q4).
Speaking on the company’s earnings call today, WMG CEO Robert Kyncl was bullish about subscription music streaming’s future.
He noted that “with both subscriber growth and opportunities for wholesale price increases, the formula for streaming growth is strong,” adding that “there is plenty of room for acceleration.”
Added Kyncl: “With penetration in mature markets expected to increase from approximately 35% today to nearly 50% by 2030 and emerging markets going from single to low double-digits over the same timeframe, music subscriber growth should remain healthy for years to come.
“For reference, in the US, cable TV penetration is a little over 50% and SVOD penetration is approaching 50%, highlighting that even in a mature market, music penetration is very low and has plenty of runway ahead.”
Elsewhere on the call, Kyncl explained in his opening remarks that Warner Music Group has “reimagined” its organization this year, “based on the principle that simplicity and focus drive higher intensity and impact”.
He added: “We’ve done a lot of important work, which has set us up for success today…and will help us grow more profitably in the future.”
Those efforts, said Kyncl, have included strengthening the company’s presence in the US, the world’s largest recorded music market and “shift[ing] to a simpler and flatter organizational structure… to create faster and more direct channels for local talent to reach the global stage”.
“We’ve done a lot of important work, which has set us up for…
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