Warner Music has taken the unusual step as a private company of revealing results to show how its restructuring efforts under its new owner, Edgar Bronfman, have helped turn losses into operating profits.
The success of two of its artists - Josh Groban and Jet - was not enough to boost half-year revenues from a year ago, but job cuts and label consolidation helped produce operating profits of $21m, compared with a $36m loss a year ago, when the company was part of Time Warner. "We have now completed the majority of our restructuring effort, positioning Warner Music Group as a lean and flexible music company," Mr Bronfman said.
Warner Music's turnaround comes amid a spate of good news for the industry's big players, as Vivendi's Universal Music - the world's biggest seller of recorded music - last month announced its first sales rise in three years and Sony and Bertelsmann overcame early regulatory objections to complete the merger of their recorded music units.
The industry, now dominated by Universal, Sony, EMI and Warner, is trying to recover from several years of plummeting record sales brought on by CD piracy, illegal online downloads and competing forms of entertainment, such as video games and DVDs.
Mr Bronfman, with the backing of private equity investors, bought Warner Music - whose artists include Madonna - for $2.6bn in March. He quickly announced he would lay off 20 per cent of the workforce, and later merged the Atlantic and Elektra labels.
Warner Music said recorded music revenues in the six months to 31 May went to $1.22bn from $1.26bn, but publishing revenues increased to $286m from $248m. However, from March to May, recorded music revenue declined 14 per cent to $591m compared with the same period a year ago. The company blamed this in part on a delay in releasing albums spurred by the merger of the labels. "The company expects that revenues for the group will improve in 2005 as the release schedule is normalised," a spokesman said.Reuse content