Warner Music Group saw double-digit digital revenue growth in its fiscal 2020, rising to $2.9b, representing nearly two thirds of the company’s income. Despite the effects of the pandemic, the fiscal fourth quarter—the summer months—broke even with the same period a year earlier.

“Our streaming growth has stayed strong, and we’ve also seen an acceleration in a whole spectrum of emerging revenue streams such as social media, gaming and in-home fitness,” WMG CEO Steve Cooper said. “In this increasingly complex environment, where music is woven into every aspect of our lives, our creative expertise and global reach are more valuable than ever.”

Excluding the segments particularly hard hit by COVID-19 due to a lack of touring— artist services, expanded rights and performance revenue in Music Publishing— total revenue would have increased 3.6% in fiscal 2020 and been up 9% in Q4.

While Recorded Music’s digital revenue was up 10%, to $2.57b, in fiscal 2020, overall revenue in the division was down 1% for the year, to $3.81b. Music Publishing was up 2% for the year ($657m), with digital revenue hitting $337m, a 24% spike.

In a call with stock analysts, Cooper said the “silver lining” of the pandemic was an “opportunity to recalibrate our long view … and the importance of technology in how we sign talent, market music and pay royalties.”

Looking forward, Cooper noted WMG’s efforts and alliances in social media, gaming, TV and film, home fitness and Virtual Reality as key to continued growth beyond streaming.

He said the company had expanded its number of partnerships with social-media platforms and platforms that host virtual concerts to “defy real-world limitations.”

"We're looking at gaming as a multidimensional opportunity for our artists," Cooper said. "[Special game] events attract millions upon millions of users and add flavor to the game. Gaming creates value for artists, value for the gaming community and value for Warner Music Group."

WMG intends to continue investing in home-based entertainment such as livestreaming and VR concerts. Cooper said it’s his personal view that people’s habits have changed over the last seven to nine months and that there is “some concern about returning to a maskless society,” especially in terms of packing arenas and stadiums.

Whether live music returns in 2021 or early ’22, Cooper said, “how it plays out is highly uncertain," adding, "Our intent is to identify the trends and, whichever way the wind blows, be there to support them.”

WMG EVP/CFO Eric Levin likened the gaming/social media/fitness world to “the very early days of streaming,” breaking down how different it is from Spotify and Apple Music.

Unlike streaming platforms, where a single service is generally used per household, there are multiple opportunities per household for social media and gaming, etc. The “total addressable market,” Levin said, is much harder to calculate, but it has “become enormous" and "new services that use music are launching all the time." Almost all are interested in licensing entire catalogs and adding new content on a regular basis.

Despite the 10/1/19-9/30/20 period being flat relative to the previous fiscal year, WMG was up 14% in adjusted EBITDA and 11% in adjusted OIBDA.

“As we look toward the future, we are confident in our long-term growth prospects, particularly as the areas of our business that have been most impacted by COVID return to normal,” Levin said.

Cooper singled out a wide range of successes in fiscal 2020—Pop Smoke, “WAP,” Dua Lipa, Robert Plant’s podcast Digging Deep, Spike Lee’s film of David Byrne’s American Utopia and Fleetwood Mac’s “Dreams” among them. He said he expects 2021’s release schedule to be “back-end weighted.”

In the fourth quarter, revenue of $1.12b topped Wall Street forecasts.