Warner Music Group continues to sing a sad tune when it comes to its financial performance. It reported today that it had a net loss of $103M in the quarter that ended in September, 124% bigger than its loss in the same period last year, on revenues of $707M, down 6%. The financial report is mostly for bondholders; Russian-born billionaire Len Blavatnik’s Access Industries bought the company in July for $3.3B. Still, it’s a dreary filing for the company, whose roster of hitmakers includes Bruno Mars, Cee Lo Green, Red Hot Chili Peppers, and Jill Scott. Warner says that its recorded music revenues fell 8% to $571M. Although sales from digital distribution were up 6% to $194M, that was “more than offset by contracting demand” for CDs. Meanwhile, revenues at the music publishing operation fell 1% to $141M. Warner says that the quarter’s disappointing results were due to “a light release schedule”; weak sales in the U.S., Japan, and most of Europe; and rising interest payments on the debt Access took on to buy the music company.
Warner was the odd company out last month when Citigroup announced that it agreed to sell EMI’s recorded music operation to Vivendi’s Universal Music and the music publishing unit to a consortium led by Sony. Warner CEO Stephen Cooper says that “it’s difficult to predict how that acquisition is going to work its way throught the scrutiny of the regulatory process.” Former Seagram and Vivendi Universal chief Edgar Bronfman Jr said this week that he’ll leave his job as chairman of Warner Music in January, but will remain on its board.


I said it when Blavatnik bought the company, and I’ll say it again: burning money must be some sort of Russian national pastime that we just haven’t heard about.
Sounds to me someone is gonna be selling their library off real soon.
I think part of the problem is music in general sucks. There’s not much new. and what is around all sounds the same.
One of the side effects of the end of the cold war was creating a group of billionaires with more money then sense.
3.3 billion for a business that loses ~150 million on sales of ~750 million is amazing. Smart to take on debt to get that kind of action.
If they only embraced blu-ray audio or DVD PCM high resolution formats they would have given everybody an excuse to upgrade their CD collections. But “no”. They know best. Cheap, cruddy mp3′s is all they’re offering, so what’s the point? A CD/DVD or CD/Blu Ray combo disc would have been a game changer, they would have offered a generation that has no real understanding of high resolution a real choice. Fail.
“roster of hitmakers includes Bruno Mars, Cee Lo Green, Red Hot Chili Peppers, and Jill Scott.”
Suck, Suck, Suck and Suck. No wonder they got no revenue from me, or anybody who likes actual music it seems.
Over-hyped, One-hit Wonder, Old-school Wonder, Who?
If he wants to run it like a dinosaur industry (ie: Kodak), then yes, it should be grounded or sold off for scarps in a few years but if he had any brains or wasn’t locked into legacy thinking, there are about 10,000 ideas that the music industry might want to explore or implement if they weren’t so afraid … if nothing else, I’ll bet only about 15% of everything that WB owns is on itunes FOR STARTERS.
This whole situation is pretty ridiculous, since Warner continues to screw over the last national music retailer in Canada. It’s pretty ironic that a company that’s hemorrhaging money, would leave money on the table when there is someone out there willing to sell their products.