Warner Music Group revenue was up 11 percent in Q2 2017. Also, Amazon Prime unveiled a new live-streaming concert series. And Pandora said it is looking for a buyer and a new board.
Warner Music Group Revenue Driven Up by Streaming Surge
Warner Music Group was up 11-percent in the second quarter of this year, according to Billboard.
This growth was driven significantly by streaming revenue, which accounted for 50-percent of WMG’s total earnings. Digital revenue as a whole, including streaming was up 22-percent, twice as much as physical revenue. Artist services and rights brought in $81 million whereas licensing took in another $63 million for the same period.
WMG’s CEO, Steve Cooper said, “Our streaming revenue is now double that of physical and triple that of downloads … An improved industry environment is helping, but we continue to outperform our competition due to fantastic new music and outstanding execution by our operators around the world.”
Recorded music revenue was up in the U.S., Latin America and Asia territories. WMG’s best sellers included Ed Sheeran’s ÷, Bruno Mars’ 24K Magic and Twenty One Pilots hit song “Heathens” from the Suicide Squad soundtrack.
In the area of music publishing, WMG saw a 14.2 percent boost in revenue thanks to performance, digital and synchs. Mechanical revenue stayed the same.
Operating cash flow was $70 million in this quarter, $31 million less than in the same quarter of 2016. The company explained, “The change was largely a result of working capital use related to higher receivables at quarter-end due to improved operating results, which more than offset the increase in OIBDA.”
Eric Levin, WMG’s chief financial officer expressed excitement about the year-over-year growth in revenue, but was careful to set expectations lower for the rest of the year: “Although tough comparisons could make for a more challenging second half, I’m confident we’ll have another great full fiscal year.”
Amazon Prime Launching Live-Streaming Concert Series
Amazon announced Prime Live Events, ticketed, exclusive livestreaming concerts available to Prime members, reported Engadget. The events will be based in London.
Prime Live events adds additional inventive to the “all-in” subscription enjoyed by Prime members and will start on May 23rd with a performance by Blondie at the Round Chapel in Hackney. Alison Moyet will be second up on June 12th, followed by a Texas set at Porchester Hall four days afterwards. According to Amazon, more shows will be forthcoming.
All concerts will be filmed and released worldwide through Prime Video. The app’s success will continue to be dependent on having a stream of exclusives, particularly since Netflix has been establishing itself in the live comedy realm. Live concerts could give Amazon leverage and bring in music fans who haven’t pulled the lever on a subscription yet.
Amazon has previously attempted to get into live music events. It hosted a Robbie Williams concert on December 14th and another for John Legend the following day. Both were limited to Amazon customers and released subsequently through Prime Video. These concerts were a trial for Prime Live Events.
Amazon also announced it will be updating Amazon Tickets, the online portal that allows users to buy live music, theater and comedy stubs. Prime members will now be able to buy tickets ahead of public release through the Amazon Tickets portal.
Industry experts indicated that the new events hosted by Amazon and Netflix are likely to put pressure on Apple to expand beyond its successful Apple Music Festival in London.
Pandora Seeking a Buyer and to Revamp Board
Digital music service Pandora was able to raise $150 million and is currently looking for a buyer or other “strategic” options, according to a statement made on May 8.
The Hollywood Reporter also said that Timothy Leiweke, former CEO of Anschutz Entertainment Group is tasked with looking for new directors for Pandora’s board. Pandora stated that two members of its board, James Feuille and Peter Gotcher are resigning.
The $150 million investment came courtesy of KKR, a private equity firm.
The statement from Pandora also explained, “At the upcoming 2017 annual meeting of stockholders, the board will recommend that its stockholders approve a resolution to declassify the board and provide for the annual election of directors in the future.”
Firms Morgan Stanley and Centerview Partners are currently helping Pandora review financial options.
Feuille added, “Having secured a significant financial commitment from KKR to strengthen the company’s balance sheet, we have positioned the company to evaluate any potential strategic alternatives, including a sale, in the 30 days before the financing is set to close.”
Pandora’s decision came at the same time it received quarterly results indicating that its active listener base had fallen by two million and that its’ cash in hand had fallen by $40 million.