paidContent 50: The world’s most successful digital media companies

48. Warner Music Group

Music, United States (Private)

Last year’s rank: #25

Digital Content Revenue

$768,000,000 (26% of total)

Digital Snapshot

In digital, Warner is at simultaneously both innovative and conservative. Its technology teams have overhauled the way the label approaches online artist marketing, for instance, by transitioning to the free Drupal content management system. But WMG also plays hard ball in licensing digital services. It refused to renew’s license to use its music, has decided not to license purely free ad-supported digital distributors and, during the heyday of the music video game boom, chastised game publishers for paying too little in royalties.

Key Move

R.E.M.’s retirement wasn’t the biggest date in Warner’s calendar. The group sold itself to Access Industries — aptly named, since, following years of skepticism, it has finally come around to the promise that unlimited-access music services like Spotify, Mog and Rdio might grow music-industry revenue. It is this that new CEO Steve Cooper, who replaced Edgar Bronfman Jr., looks toward as downloads sales slow. “You will eventually see those lines cross,” he said. Recent rollouts to new countries of new and old music services helped the label offset physical declines with digital growth in its October-to-December Q3.

Our Methodology

We have added digital revenue disclosures from three quarters in 2010/11 and the subsequent single quarter.
Source: SEC 2011 10k

— RA