Music giant's Q4 net loss widens to $46 mil
Warner Music Group CEO Edgar Bronfman Jr. on Wednesday dodged questions about whether his company would pursue a merger with rival EMI following recent reports that WMG was preparing such a bid.
“It makes no sense to speculate on what happens next,” Bronfman told analysts during an earnings conference call. “There has already been plenty of speculation in the press. … When we have something to announce, if we have something to announce, you will be the first to know.”
Speculation about an EMI-Warner merger has been nearly a constant in the music biz for years, but a recent ruling by a court against EMI has fueled the latest round of rumors. Earlier this month, EMI’s owner, private equity firm Terra Firm, lost a lawsuit it brought against Citigroup, accusing the bank of misleading it during the auction sale of EMI in 2007.
In reporting its fiscal fourth-quarter results, Warner said revenues declined by 13% to $752 million, and its net loss widened to $46 million vs. $18 million a year ago.
“We continue to face significant challenges,” Bronfman said. “But fiscal 2010 was a year of strong progress.”
The highlight: Nearly 40% of U.S. revenues now come from digital, he said, vs. zero when Bronfman and his backers purchased Warner in 2004. He added that the goal is to continue to diversify Warner’s revenue mix, from mobile to artist services. Bronfman said he expected that digital revenues would continue to grow despite a slowdown in downloads in the U.S. Bronfman cited a deal struck in Europe with the streaming service Spotify and said cloud computing offered significant opportunities for “consumers and for Warner” going forward.