The major labels are in the midst of renegotiations with Spotify and several other streaming services, including YouTube. The talks come at a critical moment for both sides. Streaming is, or is about to become, the top revenue source for recorded music at most labels.
The shift to income from streaming over downloads is happening faster than predicted. Today Warner Music Group said that streaming was now it’s #1 revenue source from recorded music, surpassing physical goods and downloads.
The news came during a very upbeat earnings call. Overall revenue was up 13.4% to $745 million on a constant currency basis or 10% including currency fluctuations. Net income dipped slightly to $12 million. WMG streaming revenue grew $72 million last quarter and more than half of that growth came from outside of the U.S.
For the moment, at least, streaming revenue is growing faster than revenue fro other formats are falling at WMG, and marks the first time that any major music group hit this important inflection point. “This new milestone comes only four quarters after our streaming revenue first topped our download revenue,” WMG CEO Stephen Cooper noted in a statement.
Cooper also used the opportunity to hammer on YouTube.
“It is imperative that we ensure a fairer correlation between the massive consumption of music via services built around user-uploaded content and the value generated for artists, songwriters and rights holders,” Stephen Cooper said “We have made our views known through our submissions to the European Commission and the U.S. Copyright Office.”