Only $13 Million From Kazaa Kept WMG Profitable
Warner Music Group yesterday reported net income for the last quarter of $12 million, or 8 cents a
share. Sales fell
another 5.6% to $854 million for the quarter ending Sept. 30th.
New releases from the likes of Danity Kane and Mana
failed to match last year’s recordings from James Blunt and Faith
Hill. CEO Edgar Bronfman Jr. tried to point to 
digital sales, which almost doubled to 12.2% of total revenue, as a bright spot. But the real savior was the $13 million the label recieved from a lawsuit against online file-sharing service Kazaa. Without that WMG would have lost $1 million in that 3 month period alone.
"Revenue was a little lighter than expected,” Eric
Handler, a Lehman Bros. analyst told Bloomberg and rated the stock "neutral". He estimated revenue at $860
million for a loss of 2 cents a share, excluding one-time items. "Digital was quite strong – they’re outpacing the market
on that,” Handler said, but said CD sales were "quite weak".
WOW! Holy Heck. Is the backslide-ing of real sales (CDs and content that are real buys and can be traced back to the point of sales/orgin) also happening at WMG? Say it aint so.
Oh Boy. And then their bottom line was helped out by a lawsuit? Man, Oh Man. Folks, this industry is wounded and may just be on it’s last leg.
OK. I’m gonna say it. Bring on a British Invasion that might just give the Americans labels a swift kick in the pants that is badly needed.
Also, God Bless Hypebot for bringing this important news to the forefront of those of us that really do care about the state of music, today.
Keep up the good work.
Senator O’Brien
Thanks for the mice words Senator/ And we appreciate your comments and those of other Hypebot readers. Its what keeps it interesting.