Thursday, August 03, 2006

Warner Music Digital Revenue Up 109%

According to Paidcontent:
Warner Music Group’s FY3Q06 earnings report backs up its rep as a music company that “gets” digital. Revenue from online hit $92 million, up 109 percent from $44 million in its third fiscal quarter last year. Perhaps more important, that represents 11 percent of the company’s total revenue and digital accounted for half of the year-over-year gain. Warner continues to have a larger digital presence domestically — 74 percent of digital revenue comes from the U.S.
Although I've previously said Cordless is a flawed model of a digital record company, the parent company seems to be going in the right direction. I wonder what the breakdown for indies is? In some months, digital accounts for almost 50% of Blackout! music sales.

UPDATE- they still posted a loss though.


Ryan said...

Hey man, I really dig this site, good content here.

Can I ask you, in terms of digital distro, what's your opinion about IODA and the Orchard? I've not heard many good things about them, esp. in regard to exclusivity contracts, percentages, and so forth.

But also, there's this other place I've recently seen, called Tunecore, which apparently only charges one flat rate to get a record up, and that's it; no percentages, no exclusivity...

But my question is: why use any service if you can just, for example, apply to the Apple Store as a label yourself? Is it that these big digital music retailers reject a lot of these lone applications, while these services such as Tunecore can ensure your placement?

And finally, in your opinion, do you think there's any benefit to even offering digital if you're not going to support the release with any advertising? People tell me I should get into digital, but I'm not sure I can see the benefit. It's the same reason I refuse most offers for physical distro: what's the point of getting records into stores if no one's going to buy them?

(And yes, I do realize that it probably seems like a "broken" idea in the first place to not do any sort of marketing push...)

BW said...

I can't really be objective about either service. Orchard and eMusic are owned by the same company, and I've only had a great relationship with eMusic.

Also a friend of mine works for IODA and recently showed me the service and the flexibility of what they do. They have quite an impressive back end for labels to opt-in and out of various programs. (I can put you in touch with him directly if you email me.)

I'm not sure I'm a fan of Tunecore. They don't take a percentage, but have figured out that the "storage fees" they charge will probably wind up being more lucrative than the percentage they'd get from entry level artists. To a certain extent, they're selling the dream.

My advice on digital deals is take no less than a 15% fee (believe me it's worth every penny with all the admin you'd have to deal with.) A 2 or 3 year deal isn't that bad, and don't let them charge you "ripping" fees or bogus surcharges.

Hope this helps.

BW said...

Oh and good observation about marketing. Nothing will sell without demand and demand costs money. Far more money than it ever has before.

Ryan said...

Thanks for that, bw, s'good to hear your opinions on the matter.