WMG UP FOR SEVENTH STRAIGHT QUARTER

The ratio of streams to downloads hit 3:1 at Warner Music Group in the three months that ended 3/31 as streaming revenue was up by nearly a third in the quarter to $300m. WMG announced its quarterly earnings this morning, reporting a 12.5% growth in constant currency in the Recorded Music group.

WMG’s revenue in quarter was $825m, up 11% from $745m, with Recorded Music’s portion up to $686m from $621m. WMG EVP/CFO Eric Levin noted it was the seventh consecutive quarter of year-over-year revenue growth.

Recorded Music digital revenue hit $400m in the quarter, up from $328m. Streaming represented $300m, up from $207m, while downloads were down to $100m from $121m. Physical was down to $142m from $151m.

“Our streaming revenue is now double that of physical and triple that of downloads,” said WMG CEO Steve Cooper. “An improved industry environment is helping, but we continue to outperform our competition due to fantastic new music and outstanding execution by our operators around the world.”

In discussing the international market, Cooper noted in a conference call with investors that streaming in the U.K. rose 55% in the quarter. “We need to be careful in managing the ongoing transition,” he said, noting that Germany and Japan are still predominantly physical.

He cautioned that streaming is not “the final evolution” and the company is exploring future revenue sources such as high-res audio, voice-activated services and Virtual Reality. “The business models are nascent,” he said.

Neither Cooper nor Levin would comment on the extension of the YouTube deal that Cooper informed the WMG staff about last week.

“We secured the best possible deals under very difficult circumstances,” Cooper said. “The fight to further improve compensation and control for our songwriters and artists continues to be hindered by the leverage that ‘safe harbor’ laws provide YouTube and other user-uploaded services.”

Music Publishing revenue rose 16% in constant currency to $145m, driven by performance, digital and synchronization. Mechanical revenue was flat. Operating income was $41m, compared with $37m in the prior-year quarter.