Warner Music: Jump in Digital Sales Outweighs Loss in Physical Sales

By Karla Robinson
August 14, 2012

Despite early concerns, it turns out music streaming services may actually be a great source of revenue for labels, if Warner Music Group is any indication. The company brought in about $54 million from streaming services in the second quarter, reports AllThingsD.
Streaming services such as Spotify, Rhapsody, Pandora and others made up 25 percent of Warner’s digital revenue in Q2, amounting to around 8 percent of the label’s total revenue for that period.
For these purposes, Warner defines its “streaming” revenue as money earned from subscription services (Spotify, Rhapsody) and Web radio (Pandora, Sirius, Clear Channel). Warner does not include cloud/locker services (Apple, Amazon), but does include YouTube.
“What’s more encouraging for Warner — and, presumably, the rest of the big labels — is that streaming revenue is growing quickly, but doesn’t seem to be cutting into traditional digital sales from outlets like iTunes,” the article states.
Another positive sign for the music industry: According to Warner, the jump in digital sales was larger than the loss in physical sales. “That’s the goal the industry has been aiming for since the late 1990s,” notes AllThingsD.

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