Warner Music biz hits sour note
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[May 09, 2007]

Warner Music biz hits sour note

(Daily Variety Via Thomson Dialog NewsEdge)
Warner Music Group lost $27 million, or 19 per share, in the three months ended March 31, compared with a loss of $7 million, or 5 per share, a year ago.

Revenue fell 2% to $784 million from $796 million. Result was better than analysts' prediction of revenue of $738.1 million. Revenue from recorded music dipped 4% to $648 million, compared with $676 million a year ago.

In making the announcement, Warner Music also spelled out a plan to eliminate 400 jobs in the next year related to sales of CDs and other physical formats (Daily Variety, May 8). Company will boost hiring in new business areas, such as digital music and video, which makes the restructuring a noncost-saving move.



WMG, the third-largest distrib in the U.S., said it expects to record one-time charges of $65 million to $80 million by the end of the fiscal year related to the restructuring plan.

International recorded music sales fell 8% to $290 million, as sales in the U.K., France and Canada were particularly soft. U.S. dip was only 1%, to $358 million.


Albums by Madonna, Pretty Ricky, Red Hot Chili Peppers, Gerald Levert and Musiq Soulchild were among Warner's biggest sellers during the quarter.

Bright spots for the company continue to be in publishing and the digital domain: Digital revenue rose to $111 million, up 23% from $90 million a year ago. It is now 14% of total revenue.

Warner's music publishing revenue rose 11% to $143 million, compared with $129 million in 2006. Digital sales from music publishing totaled $6 million.

Contributor:The Associated Press

Copyright 2007 Reed Business Information - US

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