Business

Streaming and Ed Sheeran the right tune for Warner Music

Ed Sheeran Image copyright Christopher Polk/Getty
Image caption Ed Sheeran's new album went to number one in 30 markets

Warner Music Group said streaming helped digital revenues jump by more than fifth in the first quarter.

It was the first time digital accounted for more than half its total revenues, which rose 11% to $825m.

Steve Cooper, Warner Music chief executive, said streaming revenue was now double that of physical sales and triple that of downloads.

Warner was also boosted by the success of Ed Sheeran's latest album, released in March.

Mr Cooper said Warner, which also has artists including Bruno Mars and Kylie Minogue on its roster, would remain focused on growth.

"We've only had two full years of industry growth after 15 years of contraction," he said. "We can't afford to take growth for granted."

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New York-based WMG reported a 67% rise in net profit to $20m (£15.5m) for the three months to 31 March compared with the same period last year.

The rise of paid subscription services from the likes of Spotify and Apple Music have been behind the rise in digital revenues.

Image copyright Christopher Polk/Getty
Image caption Bruno Mars is another Warner Music Group artist

More than 100 million people globally now pay for music streaming services, which boosted streaming revenues by more than 60% last year, according to the industry group IFPI.

That has injected new life into an industry where profit has plunged following the rise of illegal file sharing and free listening from platforms such as YouTube.

Warner's streaming revenue increased by about a third in the US and more than 55% in the UK.

YouTube friction

WMG also recently renewed a licensing deal with YouTube, which has had a difficult relationship with the music business.

Mr Cooper did not reveal any specifics about the agreement, saying it was "the best possible deal for our artists and songwriters given the current environment".

He made clear he wanted tougher rules for websites that make money from user-generated uploads, like YouTube, which is owned by Google.

They are shielded from responsibility for user uploads by so-called "safe harbour" laws.

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Mr Cooper said those protections "skew competition", adding: "We strongly believe in the need for legislation."

As well as its recorded music business, Warner also has a substantial music publishing division.

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