Warner Music Group posted dire numbers Thursday as profit plunged 74% to $18 million USD last quarter on fewer releases and soft CD sales.
Music sales continued to take a beating this last fiscal quarter as Warner Music Group said that its fiscal fourth quarter profits plunged 74% to $18 million USD due to fewer album releases and poor CD sales.
It’s overall revenue fell Revenue fell 11% to $928 million.
“This was a difficult quarter, in some part because the industry still faces a challenging environment, but almost entirely due to the comparisons to our very strong first quarter last year,” Bronfman said during a conference call.
Its revenue from digital music sales climbed 45% from the same quarter last year to $100 million USD but, was still 4% lower than the amount sold in the quarter prior.
Revenue from digital music sales made up 11% of total revenue, and comprised 17% of total sales from domestic recorded music, which saw revenue fall 13% to $800 million USD on weaker domestic and European sales.
These figures only exacerbate the current discussion about music DRM and the future of digital music downloads.
Steve Jobs yesterday noted how DRM is a big impediment to increased digital music download sales as people would rather get it from illegal P2P alternatives then be forced to pay for content which is riddled with restrictions and rules regarding when and where it can be listened to.
Warner Music Group CEO Edgar Bronfman Jr. replied that “We advocate the continued use of DRM. The issue is obscured by asserting the DRM and interoperability is the same thing. They are not. To suggest that they cannot co-exist is simply incorrect.”
Well considering that MAC and PC in and of themselves are not “interoperable,” to try to fashion a system of DRM where all music can be played by any device and on any OS platform is simply ridiculous.
Plus, even Jobs pointed out the real hardship of relying on DRM at all, writing:
The problem, of course, is that there are many smart people in the world, some with a lot of time on their hands, who love to discover such secrets and publish a way for everyone to get free (and stolen) music. They are often successful in doing just that, so any company trying to protect content using a DRM must frequently update it with new and harder to discover secrets. It is a cat-and-mouse game.
Maybe another fiscal quarter marred by such staggering continued losses will help Warner Music Group and other major record labels see the light but, considering they haven’t seen the light about much of anything in years, I’m not going to hold my breath.
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I won’t hold my breath over them learning anything either. Though if they continue in their decline they will have to do SOMETHING lawsuits don’t work scare tactics don’t work….and DRM DOES NOT WORK ….they need to get this message through their thick heads!
gee maybe their customers don’t have any more money cuz they gave it all to their lawyers after warner SUED them!!!
@dubsytlee…LOL! Now there’s a thought…..