M+E Daily
Digital Now 40% of U.S. Music Market for Warner; Downloads Flat with Last Year
Story Highlights
Digital products now account for 40% of Warner Music Group’s domestic recorded music revenue, though the U.S. market for downloads plateaued during the company’s fiscal 2010 (ended Sept. 30).
Domestic digital revenue amounted to $421 million for the year, up from $419 million in 2009. New albums from Michael Bublé, Jay-Z, Linkin Park, and Muse, along with the “The Twilight Saga: New Moon” soundtrack, helped sustain the U.S. digital market in 2010, as demand for ringtones continued to decline.
WMG saw a global growth for downloads in its fourth quarter, however, thanks to a stronger release schedule. Quarterly digital revenue of $183 million represented a 7% increase over the same period in 2009 for the company’s recorded music segment.
Overall recorded music revenue for the full year declined 7.1% to $2,455 million (down 9.2% on a constant-currency basis). Domestic recorded music revenue declined 11.2% from 2009 to $1,043 million.
Tapering CD demand drove the declines, WMG said. International markets helped overall digital recorded music revenue grow 8.7% over the prior year to $713 million, representing 29% of segment revenue for the year (up from 24.8% in fiscal 2009).
New Manufacturing, Distribution Agreement with Cinram
Seprately, replicator Cinram announced today that it has entered into a series of new agreements with WMG to serve as the music company’s primary supplier for manufacturing and distribution services in the U.S., Canada, and parts of Europe.
Cinram has enjoyed a supply relationship with WMG since 2003, when the company acquired the CD and DVD manufacturing businesses of Time Warner.